E-Trade Announces Another Acquisition

E-Trade Financial Corp., the third-biggest discount brokerage, agreed to buy Kobren Insight Management for about $50 million, adding a mutual fund manager that oversees about $1 billion.

E-Trade, which announced Monday that it would purchase rival broker Harrisdirect, said the Kobren acquisition would add $10 million to revenue and $2.3 million to net income next year. Eric Kobren, the former Fidelity Investments executive who founded his Wellesley Hills, Mass., firm, will stay with E-Trade for an unspecified period.

New York-based E-Trade has expanded beyond its Internet- based stock brokerage to offer financial products such as loans, mutual funds and money market accounts. The $700-million purchase of Harrisdirect from Toronto-based Bank of Montreal would still leave the company behind Charles Schwab Corp. and Ameritrade Holding Corp. in daily trading volumes.

“They’re trying to differentiate themselves through offering more advice,” said Keefe Bruyette & Woods analyst Richard Herr. “But the company needs to be careful not to overestimate the potential cross-sell, because discount brokers in general are looked at as a place to trade without any advice.”

Kobren and about two dozen of his employees will now work for E-Trade.