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Five analysts and top management from nineteen sector firms examine the Brokers & Asset Managers sector in this special 98-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info383.htm

TWST: How have the stocks performed as a group, compared to the market as a whole over the last six months?

Mr. Keene: Oh, goodness, over the last six months, I believe they have been relative underperformers, especially compared to the Dow. The sector has been pressured not only by continued declines in trading volumes, but margin balances have fallen fast from the peak and, therefore, net interest revenue has come down along with commission revenues, which are the two primary revenue drivers for these firms, so fundamentals are not looking good.

TWST: What’s it going to take to effect some kind of a turnaround?

Mr. Keene: It’s going to take a fundamental improvement in the economy, and even though it could be slight, just some sustained improvement in the equity markets. You know, if investors can just become more hopeful, that might at least spark some interest, but so far, it’s been choppy. April was kind of a head fake, because it was a pop from March, but then May is down and June looks terrible. Now that we’re into the summer, I’m thinking we’re going to have to make it through August, and then see what the economy looks like in the fall.

TWST: How should an investor approach these companies? Are there any that investors should buy, or could buy, today? Have we reached the bottom?

Mr. Keene: I think we have to be near the bottom, although there’s still reason for caution, because the forward “e,” if you will, is still in question. However, if you have a long-term perspective, a name like Schwab (NYSE:SCH) would probably be a good bet. They are profitable, even though they’ve been through some tough times lately. I would imagine they’re going to maintain a dominant position within the industry, and it’s just a matter of time before the market comes back. I would think that Schwab might be a reasonable bet for a longer-term investor — longer term being at least one to three years out.

TWST: Are there any company-specific concerns?

Mr. Keene: I think their strategy is intact. It’s believable, and when the market was strong, they seemed to be executing very well. Throughout Schwab’s history, they’ve been moving upstream with their clients. They started out, as you know, as a discount brokerage house, and I think they’ve done very well by not abandoning the lower-tier beginner investor, if you will, while following their more seasoned clients up the food chain. I believe it’s a wonderful company, they’ve just come under some tough times, and I think it’s noble of Mr. Schwab to acknowledge the mistake that he made in thinking that the strong trends of 1999 and 2000 would continue and not relying on his experience of managing the business over his career to tell him that maybe it wasn’t sustainable. However, a lot of people including myself, were expecting too much from the industry in the way of continued growth.

TWST: How successful has Schwab been overseas?

Mr. Keene: They have not been as aggressive as other firms overseas. This is a bit of an exaggeration, but I kind of look at their UK operation as the branch outside the country. It’s not quite that bad, but they have really not been very aggressive. They’ve certainly done well by harvesting the ground here in the US, but when the economy turns north again, at some point, I’m sure the race to gain ground overseas will resume.

This special issue includes:

1) Brokers & Asset Managers - In an in-depth (11,900 words) Analyst Roundtable, Amy Butte, Managing Director at Bear, Stearns & Company, Mark Constant, Senior Vice President/Executive Director at Lehman Brothers and Dean Eberling, Senior Vice President at Keefe, Bruyette & Woods, examine the outlook for the sector including, brokerage stocks performance, money fund flows and share specific stock recommendations.

2) The TWST confidential Off-The-Record survey of management performance at twenty sector firms asked market insiders about the ability of management teams to create shareholder value.

3) Outlook for Brokers & Asset Managers - In an in-depth (2,700 words) Analyst Interview, Joan Solotar, Senior Brokerage & Asset Management Analyst at Credit Suisse First Boston, examines the outlook for the sector and shares specific stock recommendations .

5) Electronic Brokers - In an in-depth (3,600 words) Analyst Interview, L. Russell Keene III, Vice President at Keefe, Bruyette & Woods, Inc., examines the outlook for the sector and shares specific stock recommendations.

4) CEO interviews (average 2,500 words). Top management of nineteen sector firms examine the outlook for their firm and the sector.