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Ameritrade revamp puts focus on clients

The battered Internet broker announces that it has restructured its management team and consolidated into two divisions.

Battered Internet broker Ameritrade on Wednesday announced a companywide reorganization intended to help it better meet the needs of clients.

The plans include the appointments of a chief strategy officer and chief administrative officer, both newly created positions. The company also intends to consolidate its entire business into two distinct divisions--one for private clients and the other for institutional clients.

The sweeping changes come as Ameritrade struggles to survive the overall economic downturn and the general slowdown in trading. The company, based in Omaha, Neb., has made a series of job cuts and experienced lackluster quarterly earnings.

Earlier this year, Ameritrade slashed about 230 full-time positions and 120 part-time spots in response to slower-than-expected growth in online trades that has also hit rival E*Trade. In recent weeks, shares of Ameritrade have flirted with a 52-week low of $3.75.

In a conference call Wednesday morning, Chief Executive Joe Moglia acknowledged the recent challenges but said that Ameritrade has taken the initiative in dealing with them, and that he's confident the reorganization will get Ameritrade on a healthy path.

"We know what our goals are, we know what are our priorities are, and we also know our clients want two things--great service and help achieving their financial goals," said Moglia. "This is a big step, but it's not the only step...We've got a lot of work ahead."

Stock price from June 2000 to present.  
Source: Prophet Finance
As part of the company's plans, Moglia will lead a restructured executive management team with several current members and new appointments. Phylis Esposito, formerly with Bear Stearns and other major investment banks, joins Ameritrade as the new chief strategy officer overseeing partnerships, corporate communications and marketing.

The company has also promoted Kurt Halvorsen to take on the chief administrative post responsible for communications and coordination of the executive management team. Halvorsen most recently served as president of Ameritrade clearing subsidiary Advanced Clearing.

Both new business divisions will provide services tailored to specific client segments and their investing and trading preferences. The units will include several target services such as retirement and 401(k) plans, order management and support for hedge fund and money management clients, and corporate services for such things as employee benefit programs.

Pete Ricketts, who most recently served as interim president of the company, will head up the new private-client division. Vince Passione, who previously led OnMoney Financial Services, will oversee the new institutional client unit.