SURETRADE's rapid rise was fueled by a radical business model at the time – no retail branches and a $7.95 flat fee per trade commissions for trades executed through their Internet trading platform. They were one of a new breed of online only brokerage firms such as Datek, Ameritrade, E*Trade and DLJDirect that sought to democratize access to the stock market by charging low, flat fee commissions and delivering customer service exclusively through online and toll free phone channels.
In an October 1999 Fortune (magazine) article SURETRADE's president, Donato A. Montanaro claimed that they were rated the #1 broker for aggressive traders and the #2 broker for beginning investors. The firm was a division of Quick & Reilly a traditional discount broker who served clients over the phone and in retail branches.
Online brokerages like SURETRADE were considered 'deep discount' brokers and an alternative to full service firms like Merrill Lynch who charged more costly commissions based on the number of shares traded. Established 'discount' brokers like Charles Schwab typically charged commissions higher commissions than the less than $10 per trade charged by the 'deep discount' firms. By paying less in commissions to the new breed of online brokerages, customers could lower their cost basis and keep more of their trading profits. The online order entry system empowered the self-directed investor with a higher degree of control and speed over their trade executions compared to executing a trade manually by calling a full service stock broker.
In addition to a rising stock market that created favorable conditions for a new breed of 'day traders', SURETRADE's growth was fueled by nearly a hundred million dollars in TV and Internet advertising which generated new accounts and familiarity with the SURETRADE brand.
Discount stock brokerage behemoths Charles Schwab and Fidelity took notice of the online brokerages success and soon changed their commission structures to a flat, albeit higher, fee structure. Full service leader Merrill Lynch rolled out a Merrill Lynch Direct online brokerage in 1999. This was widely viewed as an effort to stem the tide of assets being transferred to the online brokerages. Many investors felt comfortable making some trades without the advice of a personal broker.
The ascent of the online brokerages was cut short by the burst of the dot-com bubble of 2000-2001, when values of many of the most heavily traded NASDAQ stocks plummeted. At this point Quick & Reilly had been acquired by FleetBoston Financial, who tolerated SURETRADE when it was profitable. However, in the wake of the dot-com crash, 'Dot-com company' and 'day trading' were popularly viewed as causes of the NASDAQ's melt-down. In shuttering the SURETRADE brand in 2001 FleetBoston sought to disassociate itself from these controversial labels which were seen to be at odds with responsible finance. They folded SURETRADE's operations and accounts into Quick & Reilly. Customers who stayed eventually became clients of Bank of America Securities in the 2004 acquisition of FleetBoston.
While the original online brokers faded from the landscape in the early 21st century, their legacy of radically lowering costs and empowering individual investors with online education and financial tools continues to be dominant driver of customer satisfaction in the investment industry.