SAN FRANCISCO -- John "Launny" Steffens, the
vice chairman who last year called online trading a "serious threat to Americans' financial lives," has gone Silicon Valley.
Steffens, sans tie, was the keynote speaker Monday at the
Jupiter Communications Online Financial Services Conference
. And he tossed around cool terms like "vertical integration," "aggregate" and "e-commerce." He even threw in "clicks and mortar" -- the latest Internet talk to describe the merging of bricks-and-mortar and online businesses. His vision of the future investing world is "anytime, any place, anywhere."
Heck, you can even call him Mr. Online. He said so.
Yes, this is the same guy who, according to
The Wall Street Journal
, said last year that "the do-it-yourself model of investing, centered on Internet trading, should be regarded as a serious threat to Americans' financial lives. This approach to financial decision-making doesn't serve clients well and it's a business model that won't deliver lasting value."
And now here he was a keynote speaker at an online financial-services conference. But here's the thing: This isn't a first. He spoke last week at an online brokerage conference in New York and on Friday was the keynote speaker at
invitation-only conference for tech honchos at the nation's top companies. That's three speeches, or an average of one every other day, in the past week.
"I guess I'm Mr. Online," he joked in an interview at the Jupiter conference.
So while investors weren't looking, Merrill says it's become an online company with a serious technology mission. But a quick look back shows it wasn't always that way. In fact, it mostly wasn't that way.
Merrill has been a full-service, broker-oriented firm since it was started sometime long before there was an Internet.
It's only been in the past six months that Merrill has begun showing something resembling an Internet strategy, and that was only after the discount world moved online en masse in 1996 and 1997.
After numerous delays, Merrill said in June that it would offer several online trading alternatives to all its customers. It had already been offering research and account statements online and started offering online trading as part of a fee-based account this spring. The New York-based firm then followed that offering up with a trade-all-you-want account in July. The big push comes in December, when Merrill launches the online only $29.95 per trade -- putting itself in direct competition with discount king
Jupiter says it asked Steffens because, among other things, Merrill Lynch is, well, a giant in an industry largely populated by Lilliputians. If they're not already, discount brokerages should be afraid, Jupiter analyst Rob Sterling said during an online brokerage panel session.
"Merrill Lynch is the tyrannosaurus rex, and the other brokerages are the little dinosaurs," Sterling added later. And it's a giant that has turned, if not all the way, at least part of the way -- say 45 or 90 degrees -- he explained.
And Steffens said that, so far, the company's initiatives are moving along smartly: Merrill is ahead of schedule on its goal to add 1.2 million customers this year and has traded 30 million to 40 million shares online since March. Contrary to speculation about a mass exodus, the company has lost only about 100 brokers with the online move and is actually up 300 brokers for the year, the executive said. He still wants to add 500 brokers a year over the next five years.
Earlier, to a packed room, Steffens outlined Merrill's e-commerce initiatives, including
. Steffens talked about research online, brokers and the Internet, customer service and innovation to serve the new types of customers coming online. He discussed distribution channels like wireless trading and played part of a tape on a New York cabbie who trades stocks in his car just to show how far things have come.
Oh, and there was after-hours trading in there as well. (Merrill plans to offer it sometime next year.) Nothing too revolutionary for an online brokerage. But for a full-service brokerage that is only beginning to get into the online world, it's a different story.
The reaction to the standing-room-only speech?
"It was interesting," said Michael Anderson, who heads investor relations at
. "I think the reason Launny was invited to be the keynote is they have such tremendous resources, staff ... that the online industry is interested to see if he can pull it off."
President Glenn Tongue, whose business probably has more in common with Merrill than Ameritrade, given its parent (broker
Donaldson Lufkin & Jenrette
), added, "This stuff isn't easy. They're going to have to work. ... It's about execution."
But if Steffens can morph into Mr. Online, how hard can execution be?