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I don't know why Mr. Weiss is so surprised. It is a common marketing maneuver to underprice a product during an introductory/marketing period in order to generate customers. This is no different than offering "cents-off" supermarket coupons, free cigarettes, or reduced management fees when starting a new mutual fund (common with products where there isn't much to distinquish one from the competition). The company figures that once you become a customer you'll continue since: (1) their new (higher) price is no more than the competition, (2) service/product is similar. Ergo, what's the incentive to leave them?
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It is a common marketing maneuver to underprice a product during an introductory/marketing period in order to generate customers. This is no different than offering "cents-off" supermarket coupons, free cigarettes, or reduced management fees when starting a new mutual fund (common with products where there isn't much to distinquish one from the competition).


I agree that it is a common marketing ploy to offer a reduced price on services for a limited time (such as credit card rates, for instance), but those offers usually tell you up front that the reduction is for a limited time only. American Express led us to believe that this deal was forever (or for quite some time, anyway). So I go to the huge hassel (and it was huge) of moving all of my stocks from other brokerage accounts over to them and not even four months later I'm getting screwed.

The company figures that once you become a customer you'll continue since: (1) their new (higher) price is no more than the competition, (2) service/product is similar. Ergo, what's the incentive to leave them?

If the prices and the services were comparable to the competition, I probably would keep my money there. But the services American Express Brokerage have provided are much worse than that available at Datek for half the price. Their free trades were all that made them worth it. All they would have to do is include limit and stop orders on the reduced number of free trades within their new fee schedule and it would be worth it for me to stay. But as it is, I'm leaving them.

--Cyber
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The company figures that once you become a customer you'll continue since: (1) their new (higher) price is no more than the competition, (2) service/product is similar. Ergo, what's the incentive to leave them?

The only problem here is that the new higher price is more than the competition. At least if you line them up against Ameritrade, Waterhouse, eTrade, Datek or those found in this table http://www.fool.com/dbc/tables/compare.htm in the Discount Brokerage Center. With the free trades, that was how I viewed the competition. With these prices, it's a different ballgame. That probably goes a long way towards describing why people are so upset about all this. In the announcement about the new fees, AmEx compares its fees to an entirely different group of companies. Maybe they want the customers that Schwab and its ilk have and not those of the cheaper brokers. If so, it would have probably been bette from a business goodwill standpoint to try and attract more of that type of customer from the get go rather than those that are most sensitive to price.

Phil
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Phil

Across another post recently, someone pointed out that there's competition for AXP for commission free market orders @ www.thefinancialcafe.com. According to their website, limit orders cost $4.75.

How does one determine the viability of its holding company "One Financial Network LLC" as a safe place to maintain cash and securities?

Thanks.

Fishlip:)
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Sorry, the fine print is really tiny.

Their clearing firm is called "Pension Financial Services."

Fishlip:)

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