The main drawback to wireless-access trading right now is ... wireless access.

What Works

What Works: The pros and cons of wireless trading.

What Works Best: A guide to getting started with wireless trading.

What Works Next: Help us pick the best stock screeners.

What Works According to . . . Online Investor Editor Jan Parr

Any more opinions on what works in wireless trading? Email us at whatworks@thestreet.co m.

That's the feedback from

TSC

readers who responded to last week's inaugural

What Works column, which asked readers about the wireless trading services that brokers have been promoting lately. (Our next topic is stock screeners, like those offered on

Quicken

,

CNBC.com

and

MSN Money Central

. Please read more

here and help us figure out the best and worst online stock screeners.)

Our readers' basic view on wireless trading with devices such as Palm Pilots and Web-enabled cell phones: The brokers are providing good services under the circumstances, but the circumstances are lousy.

"Wireless trading is not convenient," writes

Seth Adams

of Snoqualmie, Wash. "I found it appropriate only as a last resort, when PC or telephone use was inconvenient. The experience falls far short of how the advertising positions it."

The What Works assessment is this: If you are a tech type, in terms of both having the toys and the patience to use them, and you crave regular access to information about and control over your accounts, then wireless trading is a benefit with promising potential. Kudos to brokers for offering it as another customer option.

But if you are not, don't let the current spate of broker incentives drive you to jump in. Three folks who follow this industry say it will be at least a year until the wireless infrastructure really improves. If you're not in a rush, wait. You won't suffer.

Wireless 101

Wireless trading means trading with a device that hooks up to the Web without a physical wire connection like a phone line. The idea is to trade and get market and account information from wherever you are. (

Read up on how to get started with wireless trading.)

The main devices available right now are Palm Pilots, Web-enabled cell phones and RIM two-way pagers. (At the recent Internet World conference in New York, we saw the promise of trading through a wireless device built into your car from a firm called OnStar. More on that in 2001.) In theory, you should be able to do over wireless most anything you can do from your PC, from trading stocks and options to tracking your portfolio to following news and market averages -- even to receiving unwelcome margin calls. But for now, that's largely theory, because usable wireless access remains, in many respects, just theory. And the features that brokers offer online still don't go toe-to-toe with the PC offerings.

How Wireless Works, or Doesn't

Wireless devices are similar to regular cell phones in that, by and large, they use the same networks to receive information. (

AT&T is an exception.) That means that wireless Web access is generally as reliable -- or unreliable -- as cell-phone access. (Roaming is a different story, described below.)

You may know what that translates into in terms of reliability from your own experience with cell phones, but here's some context: According to a September survey of 3,000 mobile phone users by the Boston-based Yankee Group, 30% of users indicated they had problems with dropped calls either frequently or often. Thirty percent also reported problems getting connections, according to David Bishop, director of wireless/mobile services at Yankee Group.

A dropped call might be frustrating if it interrupts a conversation, but imagine if it interferes with a trade, leaving you wondering what happened. "If you lose the connection, you lose the connection," says Bishop. "You don't know if your funds got transferred" or your transaction was completed.

Also, the "roaming" features that let you continue your voice call on another service as you travel out of your provider's network area don't always work for the Web. So once you leave a metropolitan area, you may be out of luck.

Broad access is the kind of problem that

Ward

, a trader in Fort Wayne, Ind., who uses a wireless Palm VII and trades with Ameritrade, reports. "The city I live in seems to have only one tower that we can reach. When I go out of town there

are many areas with no service," Ward wrote, but adds: "When I have been in the signal area, I have never had a problem with reliability." Palm did not return an inquiry for comment.

Where Wireless Falls Short

The networks that wireless Web services generally rely on right now are the ones used for voice, and essentially, data travel a lot more slowly over them. The wireless service for the Palm VII is at 9.6 kbps, which is slower than the old 14.4 modems, and much slower than the 28.8 modems and high-speed lines that many consumers have grown accustomed to. The AT&T wireless service is at 19.2 kbps, again slower than a 28.8 (though according to AT&T, that's the fastest of the Web-based phone networks).

By and large the data transmitted are slimmed-down text-based information, not the Java-crazed pages that you pull up on your PC. Even so, the delivery is not as swift as voice. "For all brokers, the wireless service can be really s-l-o-w," writes Michael Tena, a financial manager for a semiconductor manufacturer in San Jose, Calif., who has used Fidelity, Ameritrade and E*Trade. An AT&T spokesman, Ken Woo, acknowledges, "If you're used to T1 speed at your office or 56k modem, you will be disappointed."

If wireless Web is your only line to your broker, perhaps it's worth the delay. But if you can use the old-style telephone, why wait? The phone keypad may be equally awkward, but at least you won't have the data delays. And if it's just information you want, not trading, you may be able to get that directly from talking to a customer service rep at your brokerage without an extra fee.

Clunky and Clumsy

Finally, there's the challenge of using a device not designed for trading to do just that. If you're trying to enter

AOL

(AOL)

or

Yahoo!

(YHOO)

, a keyboard with one letter per key is much easier than a phone keypad, with three letters per button. With the Palm Pilot, you write in Palm's script with its pen-like device or peck on a screen keyboard.

Adams of Snoqualmie, an E*Trade customer who uses a Palm III with an attached modem, writes: "It's OK, but more functional as an appointment planner than stock-trading tool. Without a keyboard, it was cumbersome to enter transactions."

Writes

Victor Leung

, a San Francisco at-home trader: "Right now punching in from a cell phone or poking around

a Personal Digital Assistant pad is similar to two-finger typing on a keyboard."

What the Future Holds

If this sounds pretty bleak, here's the bleaker news: It's not likely to get better soon. The so-called "third generation" technological advances promising to make data transmission speedier aren't expected to take hold until at least the end of 2001, says Elliott Hamilton, director of global wireless at Stragetis Group, a telecom research and consulting shop in Washington, D.C.

So, unless you're a tech eager beaver, What Works says wait. As

Jonathan Fotos

, an investment analyst and a satisfied DLJdirect user and

Verizon

wireless customer, writes, "Trading on a cell phone is kind of slow, and entering data on a phone keypad requires patience and practice." Those are burdens most folks simply do not need to bear.

But some, like Fotos, might not mind swapping the time and money for the benefit. And it's always good for the consumer to have more options. "I do travel a fair amount and find myself spending a lot of time in conference rooms or attending presentations, and very much appreciate the ability to trade basically whenever and wherever I want," says Fotos.

Still, even the brokers seem to recognize that most folks can do without. At Fidelity, active in this area for two years now, less than 1% of the customer base is using the wireless brokerage service.

"The growth has been as good as we would have expected; we knew that it was a niche product," at least initially, says spokesman Jim Griffin.

So why build it out? Full-service-type online brokers understandably want to be cutting edge now, and be prepared if and when the technology goes mainstream. (Not to mention the fact that the folks who want constant account access are likely to place trades that make brokers commission dollars.)

Where the argument breaks down is in the advertising and giveaways. For most folks, this service seems more trouble than it's worth right now, especially with the availability of touch-tone trading and the prevalence of PCs. Consider that tradeoff amid the current ads promoting a rebate or credit or even giveaway for a phone, in exchange for an injection of new funds or opening a new account. Given the current limits of wireless service, those deals seem one-sided for the average bear.

The brokers disagree. DLJdirect president Glenn Tongue says: "We have not been getting push back from our customers. For our customers the wireless devices are not the primary tool; they serve as a supplemental tool that provides added convenience."

Waterhouse spokeswoman Melissa Gitter acknowledges: "For the vast majority of people this is not a necessity in their day-to-day lives." But she says, "We are providing

various promotional opportunities to customers, and they can choose whether they want to receive airline miles and whether they want to receive a Web-enabled cell phone." She adds that it's part of the firm's business strategy to offer customers a variety of access channels. Schwab echoed a similar sentiment, calling its promotion "a way to help potential new customers experience the benefits of that particular kind of access to Schwab services," says spokesman Greg Gable. "Do we think this will appeal to everybody? No."

One broker avoiding the issue altogether is Datek. The Iselin, N.J.-based firm, which caters to active traders, doesn't offer wireless trading. "It's not there yet," says spokesman Michael Dunn. He says the company has instead put its efforts toward features like options trading and extended hours. While Datek may revisit the subject in the future, currently it's "not the kind of experience our customers are used to."

It seems many customers of other brokers would agree.

Be sure to read up on

how to get going with wireless trading. And make sure you

participate in next week's What Works topic: stock screeners.