The Hi-tech investor: Livewire share trading from an online pioneer

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The Independent Online
DLJ DIRECT is among the best- known discount stockbrokers in the US. As the execution-only arm of broker Donaldson, Lufkin and Jenrette, the firm has built up a leading position among Wall Street's private investors. It has more than 650,000 accounts in the US.

The company is also a pioneer of online trading. Using a home computer to buy and sell stocks is not as new as you might think. DLJ Direct has been in the online broking business for 10 years, initially with the online service Prodigy and later with America On Line.

Here, DLJ Direct has just launched its internet stockbroking operation. It will be fighting for market share with US companies like Charles Schwab and E*Trade, and high-street names like Barclays.

DLJ Direct's service provides real-time dealing, which is emerging as the standard for internet brokers. Initially, some brokers offered trading through an email link to their offices. Real-time systems use computers rather than human beings to carry out trades. This happens almost immediately as long as the markets are open. DLJ Direct also gives its account holders access to real-time stock quotes; visitors to the site can see prices with a 20-minute delay.

DLJ Direct's website is clearly laid out and simple to navigate, and there is plenty of information for the casual visitor as well as for internet users with trading accounts. The site provides the usual mix of financial news, consensus forecasts from brokers, and company data from suppliers including Hemmington Scott and Standard & Poor's.

On the subject of costs, DLJ Direct is not the cheapest but it has one of the simpler charging structures. There are no standing charges, account charges or annual fees, so investors only pay when they trade.

The firm charges 1 per cent on trades up to pounds 2,500. Commission on the next pounds 2,500 is half a per cent and for large trades the balance is charged at 0.1 per cent.

The minimum charge is pounds 15, and the company pays 4 per cent on cash held on account. Like the other UK online brokerages, DLJ Direct requires prior payment, or a deposit of securities, to trade. It does not permit margin trading.

Although DLJ Direct is an internet-only operation, it has set up a phone- based customer services helpline for investors. These "investor service professionals" can provide technical help; thoughtfully, DLJ Direct lets customers use a free 0800 number to call.