New web-based securities Firms once evoked fear in their intended targets, but lack of immediate action has lessened the fear of the unknown. "Last year I was convinced that WR Hambrecht and Wit Capital were going seriously to threaten our way of doing business," says the head of investment banking at an incumbent bulge bracket Firm. "But now I just regard them as yet another small contender." Even one of the leading e-Finance analysts, Greg Smith at Chase Hambrecht and Quist, thinks that: "the era of the e-investment bank has faded somewhat".
The protagonists are hoping that their relative silence until now has lulled such people into a false sense of security, and look for inspiration to the success of their mutant cousins in the battle for secondary trading. Discount broker Charles Schwab led the way with on-line retail trading, followed by rival TD Waterhouse and start-ups such as Ameritrade and E*Trade.