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Charles Schwab Rated Best Online Brokerage

Due in large part to its customer service, Charles Schwab broke ahead of the pack to be rated the best online brokerage, according to a recent study done from Gomez Advisors Inc.

Gomez rated 53 online trading firms in its Winter 1999/2000 Internet Brokerage Scorecard. Charles Schwab topped the list, followed by E*Trade (EGRP) , DLJdirect (DIR), Fidelity Investments and National Discount Brokers (NDB).

Schwab's resources for attracting new customers is what put it over the top, said Dan Burke, senior analyst at Gomez Advisors. The current trend is to decrease customer service as membership increases, but Burke said Schwab was able to maintain both effectively.

"The key to success for online brokers is managing all of this new business and providing the services that customers are demanding," Burke said. "Brokers must ensure their customer service keeps pace with their account growth."

Online trading has grown to become a leading e-commerce function on the Web. Last year's scorecard was compiled with only 20 brokerages, with DLJdirect taking the top spot, followed by Discover Brokerage, E*Trade, Datek, with Schwab placing fifth.