Speed thrills. That's the message from the online trading public, which, for the third time in a row, has made

Datek

the winner of

TheStreet.com's

Online Broker Survey 2000

. Datek's fast order confirmation, speedy executions and strength in complex trades helped put it over the top despite relatively poor marks for customer service and a spotty history with regulators.

We ranked the online brokers according to what readers said was most important -- nine

categories ranging from reliability to real-time news.

In calling a winner, we divided the brokers into two main groups, depending on how many votes they received. The League A brokers received votes from more than 650 respondents. League B brokers were firms that between 72 and 307 voters identified as the primary broker. (For more details on methodology, see our separate

story.)

Within League A, Datek topped competitors like

Fidelity

and

Schwab

(SCH)

.

TD Waterhouse

(TWE)

, which tied for third in our previous 1998 survey, tanked this time around, placing last by a longshot among our League A brokers.

Within League B, tiny

Dreyfus

took first place. Of course, just as it's probably easier to be mayor of Podunk than of New York City, it's probably easier for Dreyfus to please 49,000 customers, about one-tenth of Datek's. That's one reason why we broke the results into two leagues. Of the League B'ers,

Quick & Reilly

finished dead last.

Datek

Meanwhile, back in League A: How much of an advantage is Datek's vaunted speed? Datek has built its marketing around the idea, promising to waive commissions on marketable trades that take more than one minute to execute. "So far I've never needed to take them up on that offer," said

Matt Carpenter

, a survey respondent.

Industry analysts said most online brokers execute market orders within 30 seconds; Datek said its market orders are often filled in 10. Why so quick? Datek's trading system was made for speed-obsessed daytraders and is strictly designed for the Net, without incorporating old-school trading systems.

Another key Datek advantage is that it operates the

Island

electronic communications network that matches buyers with sellers. Not only does it often make for quicker executions during normal trading hours, but also it gives Datek the ability to offer trading from 8 a.m. to 8 p.m. (For more details on after-hours trading, see our separate story on that topic on Monday.)

Readers also ranked the broker tops in charging low commissions. Datek charges $9.99 for market or limit-order trades of as many as 5,000 shares. Datek also ranked first in after-hours trading, though that factor didn't contribute to the overall score of the winner.

When it came to customer service, however, readers were underwhelmed. The firm has gotten weak marks on customer service in past

surveys, too.

"They really need to hire some smarter people to answer the phones," said one respondent. Another,

Felicia Bauer

, who has used Datek for three years, called the firm's service staff "incredibly inexperienced."

Datek spokesman Michael Dunn said the firm is "ramping up the number of customer-support staff" in its ranks and made phone and email service round-the-clock this year. Last year, the firm had 114 customer-service reps, and today there are more than 400.

Datek ranked third among major competitors for site reliability, which was readers' most important criterion.

DLJdirect

(DIR)

and

TheStreet Recommends

Fidelity

ranked first and second, respectively.

Dunn admits to "growing pains," but contends that reliability is a sticking point industrywide. (We'll take on reliability on Friday.)

Datek also did not fare well in the breadth-of-products category, ranking last among the League A brokers. But that's fine with Datek. "We don't want to become a full-service firm. We want to focus on trading capabilities," said Dunn. He adds that quick execution is a plus for active and low-turnover traders alike. (The firm doesn't offer options trading -- a favorite among many active traders -- though Dunn said it's slated for spring.)

Finally, there are lingering compliance issues about the firm. Many of them are inherited from

Datek Securities

, a discount brokerage sold early in 1998.

But last year, Datek Online

paid a $50,000 civil fine in a settlement with the

Securities and Exchange Commission

. Brokers are required to keep a certain amount of money in a separate bank account to ensure that they won't have to dip into customer accounts to meet its obligations. The SEC alleged that on 12 different occasions from March to May 1998 Datek failed to maintain the minimum. Datek neither admitted nor denied the allegations in the settlement.

Dunn declines to discuss the matter in detail, but said the problem is behind his firm.

More recently, a

National Association of Securities Dealers

arbitration panel

ordered Datek to pay an investor $100,000 for allegedly holding his sell order for four minutes in order to execute it on Island, which didn't lead to the best possible execution, according to the investor.

Do these concerns matter to most investors? The survey data don't indicate that. Still, one respondent wrote: "

I would move

my whole account to Datek but

I'm worried about their stability ... a few years ago Datek was in trouble with

the SEC."

Most consumers don't seem to care. Datek has 432,000 accounts today, up 49% from 290,000 at the third quarter's end.

TD Waterhouse

Consumers do care about quality, however. TD Waterhouse practically swept the bottom in key categories among League A brokers. It was last among League A brokers in seven of the nine most important categories: customer service, account administration and portfolio tracking, complex trades, fast order confirmation, real-time news, real-time quotes and reliability.

(Notably,

Ameritrade

(AMTD) - Get Report

, which took the rear in our late 1998 survey, did better this time around, pulling ahead of

E*Trade

(EGRP)

and TD Waterhouse.)

Waterhouse will use the survey as a "useful tool," said company spokeswoman Melissa Gitter. But she added that many of the deficiencies might point to perceptions that don't fully reflect reality. For example, she said the site's performance has actually improved over the past year and customer service should be on the upswing, too.

This past year, the firm added 1,000 customer-service reps, bringing its total to about 2,700. It plans to hire another thousand this year and now has more than 170 branch offices nationwide.

Despite the improvements, one reader said the firm's "service has gone to the dogs over the last year or so." Another called the firm's service "awful," and reader

Harry Sameshima

said he's waited for as many as 45 minutes to reach a TD Waterhouse rep.

Dreyfus

And now for something completely different.

Sure, not many respondents said Dreyfus was their primary broker, but those who did were pretty happy with it. In six of the nine most important categories, Dreyfus took one of the top-three spots among League B brokers.

Dreyfus, which charges $15 on market and limit orders, also beat the pack when it came to reliability, which readers said was the most important criterion for a good broker.

The survey's results reflect the firm's strategy: to lure and keep active traders with quick execution while adding the product depth that mainstream investors also demand, said Jeff Nachman, the brokerage's chief executive.

"We know we appeal to the active investor, but we've significantly increased the number of savers among our clients, too," he said.

Of course, it's easy to shine with a modest number of accounts. But with plans to add institutional research, one of the firm's few weak spots, it will be interesting to see whether Dreyfus graduates to League A and keeps earning praise in the coming years.

Informative provided the technology to conduct this survey.