ShareBuilder Online Stock Broker Review



ShareBuilder was founded in 1996 (as NetStock) to provide both online financial information and the opportunity to participate in direct stock purchase plans and dividend reinvestment plans. In 1999, its new CEO launched a more expansive online investment site called the ShareBuilder Plan, based on dollar-cost averaging (the regular purchases of a set amount of securities on a consistent basis). ING Direct acquired the company in 2007 for $220 million.

The company sees itself as a high-quality, low-cost, easy-to-use online broker for individuals who want to invest both regularly and for the long-term. Its mission: to assist investors with discipline, diversification and dollar-cost averaging.

ShareBuilder has added several new product offerings lately: options, the ability to buy on margin and the elimination of a higher fee for limit orders.

Account Types
The following are the basic types of accounts available with ShareBuilder:
  • Individual Account: An account for one adult.
  • Joint Account: An account shared by two adults.
  • Traditional/Rollover IRA: One of the IRA options available to prepare for retirement.
  • Roth or Conversion IRA: One IRA option to help prepare for retirement (Must meet eligibility requirements set by the IRS)
  • ShareBuilder ESA (Education Savings Account): Created to help pay for the education of the beneficiary of the account.
  • Custodial Account: Account created by an adult, for the benefit of a minor.

Core Services and Fees
ShareBuilder offers three investing programs: Basic, Standard and Advantage, with monthly costs ranging from $0 to $20 and automatic investments offered for a price of $1 to $4 per trade. Trades are in real-time, although quotes are delayed. Shares may be purchased via a ShareBuilder automatic, scheduled investing plan, or by real-time trades.
Commissions
Market: $4; $11.95-$15.95
Limit: $11.95-$19.95
Options: $15.95 + $1 per contract
Account minimums: $1,000
Margin Rates: 6.0%-9.0%



Additional benefits
Research and news from MarketWatch, stock and ETF screeners, analyst information and stock grades from TheStreet.com.


Available Investments
Customers may purchase more than 6,000 stocks and ETFs, IPOs, IRAs and also may establish educational accounts.


Non-Core Services
ShareBuilder offers its customers automatic, scheduled investing, profit and loss calculators, tax tools, watch lists, customers’ top requests lists, recommended portfolios, educational articles, small business 401(k)s and Visa cards. The firm also contracts with more than 40 banks and 140 credit unions to offer additional services to its customers.


Media Reviews
J.D. Power gave ShareBuilder 4 circles for website capability and 3 for information resources, cost, customer service, trade execution and overall satisfaction.
ConsumerSearch Online Broker Reviews named ShareBuilder the best online broker for novices, citing its educational tools for beginners, no minimum balances and low cost automatic investments.
Forbes granted ShareBuilder the Best on the Web directory award, specifying that it is the most popular dollar-cost averaging brokerage with nearly one million accounts. It is a great place for a gift account, building up a college savings plan or for the starter investor: nearly 70% of its clients have fewer than three years of investing experience.
Smart Money Editors name a best and worst broker in each of six categories based on hands-on analysis of each broker’s fees, customer service, research tools, features and more. ShareBuilder, alone among the brokers included in this survey, fares poorly in two areas: trading tools and banking services.
Barron’seditor, in the annual survey of 23 online brokers, test each service by scrutinizing each sites rate policies, customer service, research tools and more. ShareBuilder ranks last overall, earning especially poor marks for its trading technology, range of offerings, and costs.


Consumers Rating
  • Viewpoints - Average Rating 4.32 of 5 (19 votes).
  • Epinions - Average Rating 3.5 of 5 (101 votes).
  • RateItAll - Average Rating 2.83 of 5 (6 votes).
  • RateItAll (2) - Average Rating 3.25 of 5 (4 votes).
  • ConsumerSearch - Average Rating 3.55 of 5 (11 votes).

Strengths
  • Low-cost commissions.
  • Allows you to buy fractional shares of stock.
  • Long-term, automatically scheduled investment purchases help build shareholder discipline, and ultimately, wealth.
  • Free dividend reinvestment.
  • Appealing to investors seeking simple investment plans few customer services.
Weaknesses
  • 20-minute delayed quotes.
  • Limited product offerings.
  • Website is not organized for efficient navigation.
Highlights
  • Sharebuilder has a very high level of female customers. 40% compared to 20% with most brokerages.
  • The typical Sharebuilder customer is much, much younger than traditional brokerages.
  • Sharebuilder has partnerships with Walmart, Costco and others. The goal being to introduce investing to the non-traditional wall street client.


Conclusion
ShareBuilder is very good at what it does: assisting customers with building their portfolios in a steady, disciplined manner for the long term. The company’s products would most likely not be appealing to active investors or traders who require more complex products, charting, research and technological capabilities.


Contact Information
ShareBuilder Corporation
1445 120th Ave. NE
Bellevue, WA 98005
WA Tel. 425-451-4440
Fax 425-451-4449
Website: http://www.sharebuilder.com/



Sources and Additional Information:
http://www.brokeradviser.com/
http://www.debtkid.com/sharebuilder-review
http://www.bargaineering.com/articles/sharebuilder-review.html
http://www.forbes.com/bow/b2c/review.jhtml?id=2007
http://www.consumersearch.com/online-brokers/sharebuilder

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