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RE: Fwd: Rule Maker: American Express Changes Fees


And, oh, by the way . . . The Olson's have multiplied.  We now have a baby
boy (Carl Bennett Olson V) born Sept 19, weighing in at a whopping 8 lbs 15
oz.  Mom and baby are doing well.  I hope, someday, to resume 'normal' sleep


-----Original Message-----
From: Jim O'Connor [mailto:jim243@bellatlantic.net]
Sent: Thursday, September 28, 2000 11:21 AM
To: Larkin Kathleen A CONT NSSC; ggainer@yahoo.com; hpd@woodland.org
Subject: RE: Fwd: Rule Maker: American Express Changes Fees

All in favor?   Aye!

-----Original Message-----
From: Larkin Kathleen A CONT NSSC [mailto:LarkinKA@NAVSEA.NAVY.MIL]
Sent: Thursday, September 28, 2000 9:37 AM
To: 'ggainer@yahoo.com'; hpd@woodland.org
Subject: RE: Fwd: Rule Maker: American Express Changes Fees

I second that motion.

-----Original Message-----
From: G Gainer [mailto:ggainer@yahoo.com]
Sent: Thursday, September 28, 2000 8:57 AM
To: hpd@woodland.org
Subject: Re: Fwd: Rule Maker: American Express Changes Fees

I e-move (if I may) that we stop any action to
switch brokers, and reevaluate choices at the
next meeting.


--- Kathe428@aol.com wrote:
> Anybody else read this?  ..any thoughts on
> this?

> ATTACHMENT part 2 message/rfc822
> To: kathe428@aol.com
> From: The Motley Fool <Fool@MotleyFool.com>
> Reply-to: The Motley Fool <otto@Fool.com>
> Date: Wed, 27 Sep 2000 16:52:46 -0400
> Subject: Rule Maker: American Express Changes
> Fees
> <FONT COLOR="#000000" SIZE=4><B><a
> href="http://www.fool.com/m.asp?i=136745">The
> Motley Fool</a>
> </FONT><FONT  COLOR="#ff0000" SIZE=3>Register
> To Become a Fool -- </FONT><FONT
> COLOR="#000000" SIZE=3><a
> href="http://www.fool.com/m.asp?i=136746">Get
> Free Stuff !</a>
> <FONT COLOR="#000000" SIZE=4>
> Rule Maker: American Express Changes Fees</B>
>  <FONT COLOR="#000000" SIZE=3>
> <b>Online brokerage customers are upset about
> the company's new fee structure. Phil Weiss
> blames the management.</b>
> <FONT COLOR="#000000"
> COLOR="#000000" SIZE=3></B>
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> <FONT COLOR="#000000"
> COLOR="#000000" SIZE=3></B>
> By Phil Weiss
> Wednesday, September 27, 2000
> Recently, <B>American Express</B> (NYSE: AXP)
> <A
> changes to the fees charged to customers of
> American Express Online Brokerage. Today I'm
> devoting the column to my reaction to these
> changes as a shareholder, as well as what it
> says about the company's management.
> American Express <A
> its online brokerage service about a year ago,
> offering free trades for account holders with
> balances exceeding $100,000, and free "buys"
> for account holders with balances between
> $25,000 and $100,000. Trade commissions were
> $14.95 for sales by the latter group of account
> holders, as well as all trades for those with
> account balances less than $25,000. This fee
> structure positioned the company as one of the
> lowest-priced discount brokers in the
> marketplace.
> If you take a stroll over to our <A
> Brokerage Center</A>, you can pull up a <A
> showing how American Express Brokerage compares
> to some other discount brokers today. Here is a
> summary of the primary policy changes that have
> been made:
> -If your account balance is more than $100,000,
> you're now allowed only 10 free trades per
> month.
> -If your account balance is between $25,000 and
> $100,000, you're now allowed only 3 free "buys"
> per month.
> -All trades that are not free are subject to a
> commission of $19.95.
> -All limit orders are subject to a commission
> of $19.95.
> Some of you might be wondering why I've chosen
> to write about this here. Is it because of the
> impact these changes have on the account that
> my investment club recently opened with
> American Express? No. It's not because of the
> impact on our Rule Maker portfolio costs,
> either. (The Rule Maker portfolio is also
> maintained by American Express.) Based on the
> way these portfolios are managed, the
> modifications won't have much impact. Both
> portfolios typically purchase at market price
> and trade infrequently. I suspect that this is
> the case for most investors with a long-term
> approach to investing.
> I'm writing this column because the changes
> leave me with concerns about American Express'
> management.
> In August I wrote a Motley Fool Research <A
> discussing <B>General Electric's</B> (NYSE: GE)
> approach towards moving its businesses to the
> Internet. My opinion is that GE is doing a
> great job converting its business from an old
> economy model to a new economy one. Before
> making the switch, GE tries to learn as much as
> it can about what its customers want and how
> its competitors could destroy its business.
> From what I've seen, it looks like American
> Express rushed to get its online brokerage open
> before it fully understood the related business
> model. You could argue that the reason for the
> changes is to combat the efforts of day-traders
> using it to cut costs.
> Why do I say this? A few months ago, the policy
> was changed to charge commissions on same-day
> buys and sells of the same security, a
> technique favored by day-traders. Many of these
> trades were also likely to have been limit
> orders, which are more expensive for a
> brokerage to process. Now American Express has
> decided to charge for <I>all</I> limit-order
> trades.
> My view is that, unlike GE, American Express
> failed to consider the impact day-traders would
> have on a business model it most likely created
> to court long-term buy-and-hold investors.
> Based on a discussion I had with the company
> about this issue last Friday night, these
> changes should also provide some additional
> revenue to upgrade the services it can offer to
> its customers. That actually sounds good, but
> I'm not so sure. The problem is that the switch
> has likely cost the company a lot of
> credibility with customers and shareholders.
> From what I can tell from my survey of the
> Fool's message boards, many people moved their
> accounts to American Express Brokerage because
> of the free trades. (Check out the following
> links for discussion board posts.)
> -<A
> -<A
> -<A
> -<A
> -<A
> -<A
> I realize companies are in business to make
> money, but I think these changes go too far.
> Worse, it hints American Express didn't think
> the issue through, or simply planned the move
> all along. Free limit orders were totally
> eliminated. In an era when most brokers have
> been lowering commissions, American Express
> <I>raised</I> them.
> Worst of all, I think the changes were a
> violation of the trust that exists between a
> company and its customers. It's hard not to
> have the perception that a "bait-and-switch"
> strategy was used to attract as many new
> customers as possible, while all along the plan
> was to pull the rug out from under them with
> changes like these once the accounts were
> established.
> When I called the company I was also told that
> complaints about the changes outnumbered
> positive reactions by about 20 to 1. This is
> also something that troubles me as a
> stockholder. The likely outcome of these
> changes is that, if they are not either
> rescinded or modified, American Express will
> lose existing accounts and/or attract fewer new
> accounts.
> In addition, the changes to the fee structure
> make American Express' position in the
> marketplace hard to characterize. Previously, I
> would have classified it as a low-cost
> provider. Now, it's not quite an
> <I>expensive</I> provider, but it's not cheap
> either.
> The bottom line is that American Express
> management is guilty of some missteps. By
> apparently failing to fully understand the
> nature of online trading from the get-go, it's
> made changes that could result in lost
> business. It also raises questions about the
> management
=== message truncated ===

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