Will Ameritrade Raise Prices After its Merger With TD Waterhouse?

Ameritrade (AMTD) announced Wednesday that it planned to merge with TD Waterhouse. During the ensuing conference call with financial analysts, CEO Joe Moglia was asked by Morgan Stanley analyst Scott Patrick the following: "...your typical customer, the 10.99 customer. Is that a customer that you think you can charge 17.95 for a broader service and still retain?". Mr. Moglia's response:

Yes. I think one thing I have not meant in the past -- I mean, when we did the Datek deal, we increased prices. But in the conversations that we have all had over the span of the last year or so, I have not meant to give the impression that I have got a bias one way or the other, specifically as far as pricing goes. In terms of what is going on now, what we want to try to do and what we will do is we will provide our clients with customization and choice. So for those clients that want a do-it-yourself, totally online experience, that potentially is one price. For the client that wants access to a branch or access to an advisor, that's otentially another price. And then there are different potential value propositions in between that, and that this what we will work hard on trying to get right... But we are not ready to go out with any of that yet.

(Quotes are from the CCBN StreetEvents transcript.)