(March 15) – “Throughout the stock market boom of the last several years, the airwaves were flooded with ads promoting the trading of stocks over the Internet as the fast route to easy riches,” writes Patrick McGeehan in today’s New York Times.

“They depicted a world where tow-truck drivers owned their own islands, teenagers had helicopters and nobody needed a stockbroker’s advice any more.”

“Then the market for technology stocks crashed, dragging the Nasdaq stock market down more than 60 percent in the last year. Pained and confused by that stunning reversal of paper fortunes, investors are searching for financial guidance. Increasingly, they are turning to the traditional brokerage firms that the Internet was supposed to make obsolete.”

“The heyday of the do-it-yourself investor is over. As their customers pull back from the market, the firms that specialized in offering fast and cheap stock trades are scrambling to recast themselves as trustworthy advisers before their customers seek refuge in the arms of conventional stockbrokers.”

“The advent of electronic trading was supposed to spell doom for those old-fashioned brokers, who were seen as overpaid peddlers of their firms’ initial public offerings, mutual funds and other products. Instead, it gradually forced them to change their ways by lowering prices, reducing their emphasis on generating trading commissions and even offering their own online-trading services.”

“Now, by many accounts, the tide is turning on Wall Street as investors lose faith in their own ability to manage their finances with one hand on a computer mouse. Trading activity has dropped sharply this year at low- price electronic brokerage firms like the E*Trade Group and Ameritrade Holdings. Investors, meanwhile, are buying more mutual funds through brokers than on their own, and traditional brokerage firms say they are attracting more exiles from cyberspace every day.”