ShareBuilder isn’t the lowest cost investment platform around, but it’s the complete package for the individual investor.
Is it one of the best platforms you can get? That will depend on what’s important to you, and what features interest you most.
Who is ShareBuilder?
ShareBuilder is part of Capital One which is one of the largest financial institutions in the US. Capital One started in 1988 and has grown from a small bank to becoming a Fortune 500 company, with over 45 million customers nationwide.
ShareBuilder is the individual investment platform of Capital One, that offers “online investing, without clutter”. It has become one of the most popular investment platforms available, as well as one of the longest running platforms in the industry.
ShareBuilder seeks to offer low-cost trading through a dynamic website that offers all of the tools that investors will need in order to be successful. The platform has innovative tools and applications, some of which are unique to the industry.
ShareBuilder Account Minimums and Fees
ShareBuilder has no account minimums, which makes it close to unique among investment platforms.
This is a particularly important feature if you are a very small investor, a complete novice who’s looking to build your portfolio from the ground up, and even and especially, to establish an investment account for children.
Transaction fees are roughly in the middle of the pack among popular investment platforms, which is to say they’re lower than what you’ll see at E*Trade and TD Ameritrade, but higher than the deep discounters like TradeKing and OptionsHouse.
ShareBuilder’s transactions fees are:
- Online Trades, $6.95 per trade
- Broker Assisted Trades, $19.95 per trade
- Options, $.75 per contract, plus the base commission of $6.95
- Automatic Investing, $3.95 (more on that below)
ShareBuilder has two different pricing structures for mutual funds.
On 100% No-load funds ShareBuilder offers $0.00 transaction fees per trade, in 70 funds such as Guggenheim, Dreyfuss, and Motley Fool. This includes mutual funds invested in through their Automatic Investment program (more on that coming up).
ShareBuilder’s “Automatic Investing”
Share Builder’s Automatic Investing program allows you to make dollar-based investments.
You can purchase stocks, exchange traded funds (ETFs) and mutual funds on a scheduled basis that you choose. For example, you can schedule your investments to take place weekly, biweekly, or monthly. You can also set up one-time only investments.
The basic pricing on this option is $3.95 per investment, and you can set up a variety of funding options.
However, if your investments are set up to use market orders or limit orders you will be subject to regular commission charges.
Automatic investment purchases are made on Tuesdays, and are conducted exclusively online. You can edit your investment and funding instructions up until 5:00 p.m. Eastern time on the Monday before your trade takes place.
“Portfolio Builder” – Build Your Own Portfolio
Portfolio Builder is another interesting feature offered by ShareBuilder.
This application allows you to design your own portfolio, based on using exchange traded funds that match your investing style. You can create an entire portfolio of ETF’s with a commission just $18.95.
You can start a Portfolio Builder plan by investing as little as $200.
You can do this by selecting your particular investment style, which you can determine using ShareBuilder’s Investment Style Questionnaire. Once you’ve established your investment style, you simply enter the dollar amount of your investment, and the program does the rest. Whatever amount of money you decide to invest will be distributed across your investments based on your investment style.
This option allows you to base your investment choices on specific dollar amounts, rather than on a certain number of shares.
Whether you choose to allocate based on percentages, number of shares, or dollar amounts, your Portfolio Builder portfolio will include a mix of six to eight ETFs, which based on the $18.95 portfolio commission, can work out to be as little as $2.36 per commission for each ETF fund purchased.
This pricing structure can be extremely beneficial if you are investing a large amount of money in your portfolio. For example, a $20,000 portfolio position costs less than one tenth of one percent to set up.
There are however three downsides to this pricing arrangement:
- The purchase of a small portfolio can be prohibitively expensive. If you invest the minimum $200, a transaction fee of $18.95 is nearly 10%.
- The commission is paid each time you invest in the Portfolio Builder.
- If you choose to rebalance or buy and sell individual securities in your portfolio, regular online trade prices will apply.
The Portfolio Builder can either be a transaction fee bargain (as mentioned above, if you take a large position all at once), or it can be prohibitive if you attempt any of the three options listed above.
All investment platforms offer various investor tools, and here are some of those offered by ShareBuilder.
ShareBuilder provides innovate tools to help you manage your account, including integrating your ShareBuilder with accounts held outside the platform.
- View your ShareBuilder and Capital One 360 accounts in one place
- Choose to reinvest dividends and capital gains automatically at no additional cost
- Import transactions into tools like Mint.com and Quicken®
This is probably the main reason investors choose to use an investment platform like ShareBuilder. Some of the information that ShareBuilder will provide access to includes:
- Analyze your portfolio by asset type, sector, global region, or market cap
- View each position’s gain or loss and cost basis
- Check out analyst ratings and rankings for your positions
If you’re an active trader, taxes can be a major stumbling block – if you don’t have the information you need at tax time. ShareBuilder makes this easy, providing the following capabilities through the Tax Center:
- Calculate your cost basis using our Gain & Loss Tax Management Tool
- Import your tax documents directly to H&R Block, TurboTax, or TaxAct
- See 1099 tax forms for the last three years
If you prepare your own income taxes with Turbo Tax – as many investors do – the ability to import your investment tax documents into the tax software will probably eliminate the most complicated part of preparing your own taxes.
ShareBuilder provides no-maintenance fee IRAs, which can work especially well with 100% no-load mutual funds and ETFs. The Portfolio Builder can also help with retirement planning, and failing that you can also call a retirement specialist. ShareBuilder also hosts small business 401(k) plans. They can be set up for a sole practitioner (Solo 401(k) ), or for a business with 50 or more employees.
They also provide the following support for your 401(k) plan, including:
- Licensed 401(k) consultants to help you determine the right plan design
- Customer Success Managers to ensure your plan runs smoothly
- Customer Care agents to help employees with access and 401(k) account use
Retire My Way
This is a pretty cool tool. It allows you to construct your retirement plan based on a combination of factors, including finances, preferences, lifestyle and risk tolerance.
The tool works in a multi-step process, and it can actually be fun:
- Screen 1 – You start by choosing a basic lifestyle – Suburban Living, City Dweller, or World Traveler, among other lifestyles.
- Screen 2 – Estimate your retirement expenses – here you enter everything from housing and basic living costs to hobbies and travel expenses anticipated in retirement – as well as what state you want to live in.
- Screen 3 – Next you enter your age, current income, anticipated retirement age, life expectancy, anticipated retirement income sources and investments and other assets.
- Screen 4 – Here you select Target Date or Fixed Allocation investing, as well as your investing style – aggressive, moderate, balanced, conservative or stable.
- Screen 5 – This screen shows you how much you need to modify your retirement savings pattern in order to meet your goal. You can choose either a steady monthly increase in savings, or increase it on a gradual basis to match your financial ability.
- Screen 6 – This is the plan summary page.
Retire My Way allows you to change the numbers and scenarios which will give you complete flexibility in creating a retirement plan that will get you where you need to go.
ShareBuilder currently offers up some nice promotions to help further entice you to join them. Take a look…
- Earn up to $600 when you transfer an account from another broker. The bonus is broken out into tiers based on how much you transfer over.
- Start an IRA and get a $50 bonus. Open up an IRA account and use the promo code MC505KIRA and you’ll be eligible for a $50 bonus. You need to deposit at least $5,000 into the account.
- Get a $50 bonus when you open a custodial account. A custodial account is an account you open for a minor (legalese for a child) that you control until they are old enough.
These offers change over time so make sure you check the ShareBuilder site for specifics.
The affiliation with Capital One gives ShareBuilder the advantage of tying in with a banking arm, Capital One 360. They are able to provide checking and savings accounts, as well as mortgage loans and business savings accounts.
This is an interest bearing checking account with no minimum balances and no monthly fees. You can also access your money for free though more than 38,000 Allpoint ATMs.
You can earn a competitive interest rate, also with no account minimums and no monthly fees, along with up to $250,000 FDIC insurance per depositor.
Is ShareBuilder the Right Investment Platform for You?
If transaction fees are your primary motivation, you can find less expensive platforms than ShareBuilder. However if you like an investment platform with plenty of investor support functions – such as those described above – ShareBuilder warrants a serious look. At a minimum, the fact that the platform has no account balance minimums makes it a great place to start investing and building up your account from humble beginnings.