Sharebuilder broker review

sharebuilderShareBuilder looks good for the passive investor.

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ShareBuilder online brokerage has a new owner. They are now part of the ING Direct group that specializes in savings with good earnings. Now you can link your savings account to your ShareBuilder account for improved returns. ShareBuilder is always ranked in the top 5 of online brokerages because it has reasonable fees and commissions, a readily accessible trading system and good customer service rather than support.

You do not have to place a minimum amount of money with ShareBuilder in order to open an account and they do not charge a maintenance fee. ShareBuilder offer a unique service among brokerages with their automatic investing and reinvesting. The target market is the passive investor. The small saver who has a regular amount of cash salary deducted and wants it all invested but doesn’t want to self-manage the portfolio. So if you are looking to make ALL of your savings work but can’t be bothered watching the Dow Jones index or making limit orders then ShareBuilder is for you. ShareBuilder will give even the small savers access to the high-priced shares with fractional shares. For example if you wanted a piece of Microsoft but only had a hundred dollars saved, ShareBuilder would place a part of a share in your portfolio and you would earn pro-rata dividends and capital growth.

All of the savers’ portfolio is in stocks or other investments all of the time because of automatic investment and reinvestment of earnings by ShareBuilder and the investor is not involved in any of the decisions or actions. The passive investor will probably be attracted by the ShareBuilder headline price of $4 trades but the more active day trader would be more wary of these ‘window’ trades. This commission is only available on buys and once a week on Tuesdays. You have no influence on say the limit price or even the timing of the sale. When you place a sell transaction the commission is $9.95. While this is about the market average, day traders and active stock pickers can do better at other discount brokerages.

ShareBuilder offers three alternative savings plans to customers. They are the ‘Basic’ the ‘Standard’, and the ‘Advantage Plan’. The Basic plan is free, does the $4 automatic stock buys and makes ShareBuilder the best value choice among the competing savings companies. The Standard Plan has a monthly fee of $12 and gives 6 free automatic investments plus additional ones at $2 each. The Advantage Plan is pricier still at $20 per month, but with many more free offers; 20 automatic investments and further investments for $1 each. Real time and options trades are a single price with ShareBuilder no matter which plan you opt for. ING mutual funds are also on offer through free trades by ShareBuilder.

With Sharebuilder the saver is buying more into a strategy than developing their own. The strategy is automatic investment and zero cash holding. Their rates for automatic trades are discounted so as to encourage the passive investor while fractional shares ensure all of the money is working all of the time. In this way, wealth is built up over the long term. The price you pay for this passive investing ShareBuilder strategy is all front-loaded. For example if you looked to put $100 each month into Exchange Trade Funds $8 per month or $96 in a year is a big cost and your ETFs need to earn over 8.6% before you start to show a profit. There are better ways to get into mutual funds but it does require effort on the part of the investor. This price is just too high for the savvy trader.

Customer service at ShareBuilder is just that. If you want customer support with lots of high-tech platforms and research data to self-manage your investments then there are many cheaper online brokerages out there.



Scottrade broker review

Scottrade

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Scottrade is one of the top four online brokerage services. It offers the full range of services around mutual funds, bonds, certificates of deposit, options and  stocks. It gives good value on a satisfactory website for investment research and trades. However reports about customer satisfaction are a very mixed bag.

Headline advertising of Scottrade pricing is $7 per trade. This is well down the price range for brokerage services and good reason to give them a long hard look. Options are $7 per trade plus $1.25 per contract. This is a little above the norm for the industry. Compared with its big 3 competitors (Ameritrade, Interactive and E*Trade) Scottrade has the lowest commission option. However, on a straight per trade comparison there are even better discounts to be had.

Where Scottrade really scores well is on fees, or more precisely, the lack of them. It seems strange to talk about things that are not charged for, but these items are so prevalent with other brokerages that it is important to consider them. Scottrade does not charge an annual account maintenance fee nor a fee when the account is dormant. Unlike many brokerage houses there are no account closing fees. This can be an important consideration when closing out your IRA. Their electronic statements are free too.

Five other services that come as a standard part of the Scottrade account are the Dow Jones real-time news, real-time streaming quotes and charts, cost basis accounting, incoming and or outgoing Direct Registration System and Direct Withdrawal at Custodian. Scottrade aims to attract the small investor too, with a low minimum $500 account opening sum.

Scottrade is very good in the area of mutual funds. With no-load, ‘no-transaction fee’ (NTF) funds, it costs you nothing to buy and sell. For funds outside the NTF program, the fee is $17 per transaction which is still cheaper than many other brokers. So, if your strategy is to focus on these kinds of funds, Scottrade’s commission in this niche will be good for you.

Scottrade has three different trading platforms, which, for the most part, work fine… while the website itself could be more intuitive and easier to look at. There are also reports of slippage between level II price quotes and their bid and ask prices.

The three platforms are:

Scottrade Trading Website – The web platform is actually web based so you don’t have to install anything on your computer. It will meet your investor requirements and is on par with the other major discount broker platforms.

Scottrade Mobile – A mobile phone application that strips down the web based version to allow for rapid trading on the go.

Scottrade Elite – Is the all-singing, all-dancing trading application that equals the hardcore trading platforms of the competition with streaming quotes, customizable and recorded sessions as well as real time news headlined continuously.

The Scottrade ‘Knowledge Center’ is a very good investor resource. It offers over 2000 articles online aimed at informing the novice investor and the seasoned professional alike. Scottrade have more than 400 branch offices across all 50 states, so on the odd occasion when you have a question too nuanced for the FAQs-type-help, you can talk with a human being in person or on the phone. In truth, blog reports for Scottrade customer responsiveness tells a very mixed story. Many say that everyone is helpful and happy to meet your needs while some other individual anecdotes can cause you to think twice. Two such repeated stories are being unable to get online when trades are about to peak, missing out on profits, an unsympathetic response and no compensation and perhaps worst than this are reports of long delays in getting settlement payments out of Scottrade. One blogger put it this way about the Oakland branch:”They take their fees pretty quick, but you need an act of congress to get them back”.

In Summary, Scottrade has good value for the money, very few extra fees, excellent platform options, but some may argue – they maybe a little patchy when it comes to personal service.