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Schwab site won't feature research

Just days after announcing that it would add third-party research services to its site, Charles Schwab has changed its plans.

Just days after announcing that it would add third-party research services to its site, Charles Schwab (SCH) has changed its plans in response to objections raised by some titans of the financial community.

Within hours of Schwab's announcement last Tuesday, brokers and executives at Merrill Lynch, PaineWebber, and other full-service brokerage firms decried the San Francisco-based discount brokerage's attempts to give away their proprietary research--for which their clients pay big bucks.

Last week the firms demanded a retraction of Schwab's announcement, according to Wall Street Journal reports. Friday, Schwab's senior vice president for electronic brokerage conceded, and said that the research portion of the Web site, dubbed Analyst Center, would not contain any analysts' reports.

Analyst Center had been intended to offer Schwab investors free investment research and analysis from third parties such as Dow Jones, First Call, Standard & Poor, and BigCharts. But Schwab was not prepared to have its competition get so riled over its distribution of the research.

Full-service firms typically pride themselves on their research departments, often using them to justify higher-priced commission rates.

According to the Journal, Schwab officials said the discount firm had contracted with First Call, a provider of financial data that electronically distributes research reports and consensus earnings estimates to institutional investors. Schwab thought the contract gave it permission to post the company's research on its Web site.

Officials from Schwab, Merrill Lynch, PaineWebber, and First Call could not be reached today due to the Martin Luther King Jr. holiday.