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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: Has the number of day traders dropped off?

Mr. Keene: That’s a very interesting question, and let me just clarify my answer by first saying there are a lot of folks who have highlighted day traders among those using online brokerage-type platforms, and let’s call those remote traders. While the remote trading volume has suffered, onsite traders are still trading and our research tells us that trading volumes from onsite day traders continue to grow.

TWST: Does the profile of the electronic brokerage client mirror that of the retail client at a traditional brokerage?

Mr. Keene: Let’s put it this way, the profiles of those two constituencies are much more similar than those of a day trader and an electronic brokerage client. However, I would say the electronic brokerage clientele, relative to the traditional brokerage clientele, is probably slightly male-dominated, and I would think the age is probably concentrated in the 30s and 40s, whereas a traditional brokerage investor’s average age is probably in the 40- to 50-year-old range.

TWST: How would you compare the online trading volume over the last six to 12 months with that of traditional retail brokerage?

Mr. Keene: It’s been similar, in terms of the trend. I think the amplitude of the rate of changes is more dramatic with the electronic brokers. Unfortunately, we don’t have perfect comparisons because the traditional brokerage firms have never really developed a habit of giving volume data like the electronic brokers, but just from what we can see in terms of the commission revenues, that’s the impression we get. And it’s still somewhat clouded if you use commission revenues for traditional brokers, because the institutional flow is embedded in that number. But that’s the general impression -– the same trends.

TWST: Let’s move on to TD Waterhouse, which, I believe, has expanded overseas?

Mr. Keene: Yes, I think TD Waterhouse (NYSE:TWE) has done a great job of emulating Schwab’s (NYSE:SCH) strategy, except they’ve been much more aggressive overseas. Their cost structure seems to be a bit lower. I look at TD Waterhouse relative to Schwab as saving on the R&D. They’ve gained a lot of ground just by following Schwab’s lead. I don’t really view anything they’ve done as a mistake. They’ve actually been a little more conservative on the infrastructure buildout, and were penalized for that during the heydays of early 2000, because of their outages, so they weren’t quite in as bad shape with respect to overcapacity. As a matter of fact, they’ve never even, to date, announced any layoffs. They’re simply reducing their employee base with their high turnover rate of about 20% annually. I like the company. Although it is still profitable, they’re getting near their breakeven because the environment is so weak. I would not be surprised if they had to come forward and announce some more aggressive expense reductions, given the weakness in the operating environment.

TWST: Would that position them to be particularly successful when the market comes back?

Mr. Keene: Yes, it would, especially considering that their competitors have a platform for their more active clients. I think TD Waterhouse is going to have to do that at some point, so I would not be surprised if they purchased one of the remaining direct access providers out there. That would be one type of merger we could expect.

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 .

4) 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.

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