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December 2, 2016

The Pros and Cons of ShareBuilder

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For those considering entering the world of online investing, ShareBuilder by Capital One is an easy and inexpensive gateway option. This full-service investment method provides you with the ability to take the process into your own hands. Or, if you’re less experienced, it gives you access to financial advisers who are ready to walk you through the system. As with any financial undertaking, this method has upsides and downsides to consider before jumping in. Keep reading for a full overview of ShareBuilder basics, so you can decide if this investment process is right for you.

One of ShareBuilder’s greatest advantages is its convenience — the services are available entirely online, so you can open your account and maintain it from the comfort of your own home — without ever setting foot in a bank. Additionally, you’ll find a number of different account types to suit your needs, including:

  • Traditional and Roth IRAs
  • Individual and joint accounts
  • Custodial accounts
  • Education savings accounts

There’s no fee and no minimum amount needed to open your brokerage account, and the cost to trade is much lower than that of your average brokerage firm. You will also have several investment options at your disposal, including stocks, mutual funds and EFTs, so you can diversify your investment and get the most out of your money. You will also be able to purchase partial shares, which is an unusual and inexpensive perk of this platform.

Another big boost ShareBuilder provides is its Service Team, which consists of real people who are ready to answer any questions about your investments and guide you through the proceedings. There are also automated tools to help you track your accounts, such as a portfolio analysis tool, an investment screener, and stock and fund ratings to aid you in making informed choices. The ShareBuilder app even allows you to conveniently trade on the go.

Though the fees are low, there are quite a few associated with ShareBuilder investing. You will pay a fee for each trade, investment or transfer you make, and the amount of the fees involved can occasionally make this a more expensive route to take.

Another downside to ShareBuilder is that you won’t have access to all the benefits of the platform unless you sign up for an advanced plan — you will have to pay a higher fee every month to receive the exclusive perks. ShareBuilder also does not offer extended-hours trading, and some of its assistance and research are not as thorough as those provided by other full-service brokerages. This makes it necessary for you, the investor, to put in your own time and research to avoid making a poor investment.

ShareBuilder is geared toward beginner traders who want investments made automatically and to have a somewhat hands-off approach to trading. People who are active traders may have difficulty with the less intuitive trading tools and abilities, and this can be a big turnoff for serious investors who trade on a regular basis.

We look at the top investing sites that compare to ShareBuilder to give you a better idea of how ShareBuilder stacks up. We reviewed everything from cost to customer service.

ShareBuilder Review

ShareBuilder website

ShareBuilder Review image
  • Price: ShareBuilder costs about average for investing, with trades at $6.95, and the options base fee is also $6.95. Options per contract are $0.75 and broker-assisted orders are $19.95.
  • Features: ShareBuilder offers some of the usual investing options, including stocks, options, ETFs, IRAs, mutual funds and bonds, although it doesn’t offer as many as its competitors.
  • Customer service: Since ShareBuilder is owned by Capital One, it does provide a high level of customer service, although it is not as personal as some of the smaller investing sites.

Ally Invest Review

Ally Invest website

Ally Invest Review image
  • Best for: Beginners. Ally Invest makes investing easy and offers a lot of education around investing, so you can make the best decisions when it comes to your money. You can sign up for Ally here.
  • Price: Trades are $4.95, and the options base fee is also $4.95. Options per contract are $0.65 and broker assisted orders are $20.
  • Features: Ally Invest offers all the typical investing options, including stocks, options, ETFs, IRAs, mutual funds, bonds, forex and trading on the International Stock Exchange.
  • Other highlights: Ally Invest doesn’t require a minimum balance, which is a nice feature that a lot of investing sites don’t offer. It also offers an easy-to-use platform and a mobile app, which are benefits for beginners.
  • Customer service: Ally Invest offers customer service both for technical issues and when you have questions about trading. It has brokers on hand to help with any of your investment questions.

TradeStation Review

TradeStation website

TradeStation Review image
  • Best for: Serious traders. TradeStation is a top-of-the-line choice for those who are serious about investing, such as advanced traders, active stock traders, and stock, options and future traders. It is a favorite platform for frequent traders and international traders.
  • Price: The minimum investment of $5,000 is a deterrent for some investors. But for those who are serious and willing to put their money where their mouth is, the initial investment opens a top-notch trading platform with a set per-trade fee of $5.00 for most transactions.
  • Features: TradeStation is geared toward the experienced trader who wants to trade in high volumes. It is a popular platform for investors whose trading includes a diverse range of products, such as futures, stocks, forex and options.
  • Customer Service: Support is available via email or telephone, and those manning the customer service desk are quick to deal with problems or concerns you need addressed. Unfortunately, customer support is not available 24/7; customer service is available Monday through Friday, 8:30 a.m. to 6:30 p.m.

To start trading on ShareBuilder, you’ll need to choose which type of account you want to open. You can select an individual or joint account, or set aside for your retirement with a traditional or Roth IRA (both of which are nontaxable). You also have the option of investing for a child by using a custodial account or education savings account.

At this point, you will also need to select the number of automatic investments you want to make per month, along with the amount that each investment should be. Then, depending on how many trades you plan to make each month, choose your plan (Basic, Standard or Advantage). If you plan to make a high number of trades per month, you will benefit from one of the upper-tier plans, as the per-trade fee lowers as you make more trades.

Once you’ve opened your account, you can start building your investment portfolio by trading or purchasing stocks, mutual funds or ETFs. You also have the option of purchasing partial stocks. You can keep track of your investments by logging into the ShareBuilder website or using the mobile app, and you may have tracking alerts set up to let you know when market changes occur.

ShareBuilder does not require any fees to open an account, and there is no minimum initial investment. There are also no fees for inactivity or annual maintenance. However, a number of fees do apply to trading and investing:

  • Online trades: $6.95 per trade
  • Investments: $3.95 per investment
  • Portfolio purchase: $18.95 per portfolio
  • Options trading: $6.95 + $0.75 per contract
  • Mutual fund trade fee: $19.95 per trade
  • Broker-assisted trade fee: $19.95 per trade

Additionally, ShareBuilder’s plans, each with a different monthly fee, can reduce the amount of fees per investment. The fee schedule for each plan is as follows:

  • Basic: The Basic plan has no monthly fee, but you will be charged $3.95 per investment. This is an ideal plan for those who are making only one or a limited number of investments per month.
  • Standard: This step up from the Basic plan costs $12 a month, but you receive six free monthly investments (and pay only $2 apiece for those after the six).
  • Advantage: For those who intend to make numerous investments each month, this plan is the most cost-effective. It costs $20 a month but allows you to make 20 fee-free investments, and you’ll only pay $1 for each investment over the initial 20.

The main takeaway from most ShareBuilder reviews is that this investment firm is for beginning investors — or for those who prefer the autopilot approach to investing. The site tools and associated trading fees are not meant to accommodate someone who is actively trading on a regular basis.

However, for someone who is just starting the investment process, it is a simple way to jump on board. The fact that you can set your account to invest automatically ensures no need for persistent oversight or maintenance.

Additionally, most reviewers say the customer service department is both friendly and helpful, but its knowledge is pretty much limited to the use of the platform. The customer service reps are not necessarily financial experts, so traders need to come to ShareBuilder with some level of knowledge or have access to help from another source.

Lastly, one commonly noted advantage that most reviewers agree on is that the ShareBuilder site is easy to use. The platform offers your account info at a glance, allows you to navigate with ease, and makes basic automated investing as simple as it can possibly be.

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