3.4
48 reviews
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Sharebuilder

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Sharebuilder
 
3.4

(based on 48 reviews)

Ratings Distribution

  • 5 Stars

     

    (15)

  • 4 Stars

     

    (15)

  • 3 Stars

     

    (5)

  • 2 Stars

     

    (1)

  • 1 Stars

     

    (12)

71%

of respondents would recommend this to a friend.

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Most Liked Positive Review

 

Sharebuilder In Theory and Practice: Level the Playing Field

The main concept with ShareBuilder that makes it unique is that it is a discount broker that allows you to purchase partial shares. While their commissions are low (from $9.95 to $1 per...Read complete review

The main concept with ShareBuilder that makes it unique is that it is a discount broker that allows you to purchase partial shares. While their commissions are low (from $9.95 to $1 per trade); being able to buy partial shares is the true innovation they've given to the amateur trader. A partial shareholder is entitled to the same risks/rewards as a full shareholder, including dividends. Of course low commissions are important, and this is ShareBuilder's main advertising point; but keep in mind that no matter what the commission is, you typically have to be able to afford a whole share in order to buy something.******Buy With the Big Boys**

Buying whole shares is probably not a deterrent if you want to buy a cheap stock, but what about a stock that's more expensive? With ShareBuilder you can actually buy $2 worth of Berkshire Hathaway B shares (typically trading over $3,000 per share ). That's 0.06% ownership of one share that you can own. No traditional broker would allow that. (Note: Even ShareBuilder won't allow you buy Berkshire A shares.  And let's face it, if you can afford a whole share of Berkshire A, you're probably not too concerned about the difference between $1 and $16 for a commission anyway.)

Because of their partial share ability, I believe for amateur investors such as myself with a small portfolio and limited funds this simple concept is extraordinary because it actually helps level the playing field with Wall Street. That sounds like a tall order, but considering my example above with Berkshire Hathaway, ShareBuilder allows an amateur investor to put money into the same high quality stocks as professional investors, and at the same proportions. That means that even a small asset base can be structured and built over time to be an incredibly diverse and broad-ranging group of stocks, regardless of share price. Theoretically, you could have a portfolio that literally matches the S&P 500 for a minimum investment of $1440 including commissions (if you had the $1 trade plan) and the minimum allowed $2 purchase for each of the 500 stock in the S&P. Of course it would take over 2 years to match the S&P stocks, and the percentage of each stock you owned would be different, but it could happen.

**So, how does ShareBuilder really work?**

Once you open and fund an account, you can invest in 2 ways: Real time trades or plan trades.

With real-time trading (or limit orders) ShareBuilder is really no different than any other discount broker. You enter a market or limit order for a stock (full shares only for real-time), you buy immediately or when the limit price hits, and you pay the commission. Real time trades with no extra costs are $9.95.

The other way to invest, the encouraged method, is through an ‘automatic investment plan'. The purpose of this plan is to allow you to buy into a stock cheaply, at a fixed cost, over time. This method allows you to dollar-cost-average each of your holdings individually. The theory being that eventually the overall value of the stock will go up above your costs, and even if you make mistakes, you'll hedge your losses and make money. You calculate your gains by the total amount of money you put in, and subtract that from the current value of your holdings.

**The Plan**

To create an automatic investment plan, you select the stocks you want to buy and the dollar amount you want to invest in each stock. You also choose whether you want to invest weekly, bi-weekly, or monthly. You submit your order, and the order goes through every Tuesday. If you choose bi-weekly, it would be every other Tuesday, or monthly. You have until 5pm (eastern) on the Monday before your order goes through to finalize your selections. (If there is a market holiday on a Monday, you must finalize your order by the Friday before.)

If you have no pre-set plan, the cost is $4 per trade to buy. As long as the plan is active, the system will re-order automatically the same stocks you selected on every specified Tuesday. You can modify or stop the plan at any time up until the Monday deadline. (I have actually been able to cancel some automatic investment purchases after the Monday deadline up to about an hour before the market opened with my Advantage plan).

The funding for your purchase comes from cash that's electronically deposited into your ShareBuilder account beforehand, or it can be drafted automatically from your bank account each week. Electronic deposits to or from a linked bank account are free. Only one account is permitted to be setup at a time however. Funds transferred will be available the next day if you put in the transfer request before 5pm eastern. You don't have to fund your account to open it, but you do have to make sure that you can afford to cover the amount that will be drafted for your periodic plan buy orders.

**What are the account options and the plans?**

You can open the following ShareBuilder account types: Individual, Joint, IRA (traditional or Roth), Educational, or Custodial. The accounts are free to open and maintain, but the IRA and ESA have yearly fees. You can open your account with a $0 starting balance.

Once the account is open, you choose which plan you would like to have, if any. Plans are Basic, Standard, and Advantage. You're actually registered for the Basic plan which has no obligation to trade just for signing up. Also depending on your plan, you may have access to certain tools that ShareBuilder provides. For example, a tool called ‘Gainskeeper' is available with Advantage, which helps you to track your dollar-cost gains. (I haven't found it to be entirely accurate so I seldom use it).

**The Basic plan: no strings attached**

With the Basic Plan, automatic purchases (if set it up) will cost you $4 per trade to buy. Real time trades cost $9.95. The beauty of the Basic plan is that you don't have to setup a plan. You don't even have to trade anything. There aren't any inactivity fees. You can fund the account whenever you like, and you can trade whenever you like. Even if you fund the account and don't trade, the money earns interest in a competitive money market account.

**Standard and Advantage plans****: A few strings, but only if you don't think ahead: **

The Standard Plan is the middle plan. Real time trades are $9.95, but it also costs you a ‘subscription fee' of $12 per month. This fee is automatically deducted from your credit card each month whether you purchase stock or not. That's a ‘string' you'll have to consider. However, if you plan to actually use your ShareBuilder account to ‘build' a portfolio, that $12 is really your commission cost. The $12 fee entitles you to 6 free trades per month when you use the automatic investing system. That works out to $2 per trade if you use all 6 trades in a month. If you go over 6 per month, it's $2 extra for each additional trade in-plan.

If you find yourself going over 8 or 9 trades (for in-plan buys) per month, you'll want to consider the Advantage Plan. This plan is $20 per month, and is automatically deducted from your credit card. But this plan entitles you to 20 free trades each month, which works out to $1 per trade if you use your plan. Again, you're charged $20 per month regardless of activity. But considering that you're only spending $1 per stock to buy any stock offered, and since you can buy a minimum of $2 worth of a stock, it's not too outrageous. If you're serious about saving/investing, you should be putting away at least that much anyway.

**The catch: selling**(Ok, it's not really a catch, but it's something you need to consider)

By now you should understand how cheap and easy it is to buy into practically any stock that ShareBuilder offers. And you can invest minimally by buying only a portion of a stock, as little as $2 worth. But on the flip side, buying cheap can lull you into a sense that everything is cheap. You must remember that when selling your $2 portion of a stock, it will cost you your real time trade price of $9.95. That can become quite expensive if you don't have a good long term strategy.  (Every so often they'll have a deal where you can sell small holdings of partial shares for less, but don't count on it.)

**Other Drawbacks**As you can see, with ShareBuilder it can be quite easy over-diversify, and lose your money if you were to need it. If you don't plan correctly, you might as well consider your investment money lost. You should only invest using ShareBuilder for the long term, and have a plan going forward, as well as an exit strategy.

****

**For daytraders, maybe, but amatures definitely**

For day traders, ShareBuilder might not be a good idea, but then again with some of the services thay've added like real time quotes and margin trading, it wouldn't be terrible either although there are limited day-trading tools or trackers for active traders.

For amature investors that follows the SB plan, their system forces you to slow down, research, and think about your purchases. It's much easier to wait until Monday afternoon to see what happens to a stock you're unsure of during the week, than to feel pressured into buying immediately. In fact, it takes a lot of faith to day-trade using your automatic (low commission) plan. If you put in a high dollar buy order on Monday night trying to turn a quick profit on a small percentage increase, it can be nerve racking knowing that your trade won't settle until sometime the next day. The keyword here: sometime; because in-plan trades are not instant when the market opens. They may not even go through until after hours Tuesday for certain foreign and ADR stocks.

Another good, rather amazing aspect of ShareBuilder is that if you do crave more risk, you can actually participate in certain selected IPO's if you qualify. This is also virtually unheard of for amateur investors with other brokers.

 

**For the Riskier: Margin and Options**

ShareBuilder has two options trading levels: Level 1 and Level 2. You are granted one of these levels based on information you give to them in your options application.

With Level 1 you can:-Write a Covered Call-Close a Covered Call-Perform a Buy / Write (Buy a stock position and write a covered call)-Perform an Unwind (Close a covered call and sell a stock position)

With Level 2 you can do what you can with Level 1, plus:-Buy a call-Buy a put-Sell a call-Sell a put

Overall the options experience is intuitive. Targeted at the amature investor, ShareBuilder has some good learning tools and resources. They also claim to limit you to pre-selected options, but I haven't run into any particular stock options being blocked yet. To put in an order, you simply look up the option chain, select your order type, and put in the order. Just like buying a stock real-time with them.

Pricing

Options are not included as an option (no pun intended) in your automatic investment plan. Therefore all options transactions are charged at 9.95 + $1 per contract. So buying a single option contract (the right to buy 100 shares of stock X at a set price), would cost you your real-time rate, plus $1. To buy 2 contracts would be your real-time rate, plus $2 and so on.

****

**Option-al**

Overall, the option to buy and sell options is nice to have. While you have to be careful, options can be a good way to take on more risk if you so choose and leverage your money a little better - if you can stay on top of things. Conversely, if you're willing to write off the expenses, being able to buy 'put' options is an excellent form of 'insurance' against your current share-built holdings.

**Margin-al**

 

Sharebuilder also gives the option to buy on margin, meaning with money on loan from Sharebuilder.  For people who know what they're doing, this can be a great way to maximize returns using someone elses money.  For those that don't know what they're doing, margin trading can be dangerous as it's a form a debt.  I have not personally used margin for trading, but the option is another nice-to-have.

**Overall**

If you have a sensible, long term strategy, ShareBuilder can be very valuable tool. It allows you to buy into the market at your own comfort level and pace. It can also allow you to make progressively better deals buying into a stock if you're diligent, which will maximize your gains while still dollar-cost averaging. It actually lends itself very well to a phrase I'll call ‘some-days trading'. Meaning that you don't trade every day, but you use ShareBuilder to your advantage by adjusting your purchases according to the market, and selling when appropriate.

But just like any investment, the fewer of something you own, the higher percentage that something must go up before you break-even on commissions. ShareBuilder makes it possible to own the minimum, and in doing so may make it virtually impossible to earn any gains at all. If your investments are too miniscule, you'd be better off with a savings account. With ShareBuilder, you may have to hold a stock for an extraordinarily long time, and accumulate a lot of it. And of course the longer you accumulate, the more buy commissions you're paying, which only subtracts from your gains. Using a traditional broker, you might have saved up enough money in advance (in an interest bearing account) to have bought full shares with more dollars, which would have lowered your percentage cost, and allowed the stock to go up less for you to make a gain.

**Advantages**-Partial shares-Automatic purchases-Low commissions-‘Express funding' (A feature for real-time trades. Allows you to fund a purchase directly from your linked bank account without having to first transfer the money and wait overnight)-Dollar cost averaging-Real time and limit order trading-IPO participation-No inactivity fees or initial obligations-Competitive money market rates-Options and margin trading

**Disadvantages**-In-plan trades may take a long time to settle on Tuesdays-Real-time sell commissions are required, no cheap plan to sell.

**Conclusion**Sharebuilder is not for everyone, but if you follow the adage that you must ‘pay to play', ShareBuilder allows you to get into the market and ‘play' (not in the day-trading sense) almost immediately and initially quite cheaply. In fact, one final positive is that it allows you to 'play' by receiving dividend income as well. If you find a high yielding dividend stock that you like, you can get in immediately with limited cash, and the percentage payout is the same. Just be careful with your buys, know which plan you'll need, and research. And be ready to commit to a stock for a long time if need be.  Think ahead, have a strategy, and in the right hands, Sharebuilder is an excellent tool for investors.

VS

Most Liked Negative Review

 

Total Ripoff

Share builder offers several plans, the most attractive for me was the $4.00 trade offering.

  By doing these $4.00 trades you can purchase shares (even fractional) based on a...Read complete review

Share builder offers several plans, the most attractive for me was the $4.00 trade offering.

  By doing these $4.00 trades you can purchase shares (even fractional) based on a fixed dollar amount and specify the frequency (monthly, bimonthly, or weekly).  For example, you can allot $500 a month and you will get $500 worth of shares purchased every tuesday at the frequency that you set.  The downside is that you don't control the purchase price.  I felt like they may be cheating me here.  By just doing a limit order, I know exactly how much it's going to cost me and I know how many shares I will get.  So in effect doing a real time trade at $9.95 will often be cheaper than the $4.00 trade.

All stock sales are $9.95.  Unless you want to buy more than 1000 shares.. then they play the "large order surcharge" game.    I tried to by 10k shares once and the commish almost $100.  This is expensive for a brokerage offering limited capabilities and services.

Options trading is VERY expensive.  $9.95 + $1.50 per contract (10 contracts = $24.95) AND they only allow you to make covered calls in a retirement account.  I understand the option limits in a cash account, but come on here.. you can't buy protective puts (which require no margin) to protect your downside??

Their website is slow and experienced severe outages on 3/09 and 10/08.  Effectively people that were in stocks during the market drops were unable to access their accounts.

I realized Sharebuilder was not right for me, so I wanted to transfer to another brokerage.  I had 5 accounts with them, 2 ROTH IRA's, 2 Coverdell ESA's, and a cash account.  They charge a $75 transfer fee on each account.  Then it took 2 weeks for them to transfer my securities to the other brokerage.  And a total of a MONTH to transfer the remaining cash out of the account.  At the time I was on 30% stocks, so 70% of my money sat on the sidelines for over a month when I wanted to put it to work.

Many online brokerages offer better service with cheaper commissions.  I would reccomend just about any other brokerage.

Sharebuilder may be right for you if you want to put small amounts ofmoney away and dollar cost average into stocks that pay dividends.  They allow automatic divident reinvestment, which I saw as a positive initially.. however, when the market dropped 50% and I couldnt access my account, dividends didn't really matter. 

 

Reviewed by 48 customers

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1.0

WHAT A WASTE OF TIME!!!

By 

from LAKEWOOD, NJ

Comments about Sharebuilder:

I am losing money because of Sharebuilder. They promised me I would make the deadline for the 2014 IRA account. They made me crazy while opening up an account. It took two months of faxing my license, passport, and social (since it was always unclear???) until my account was approved.Every time you send a fax it takes two days until someone sees it. For some reason they do not accept documents through email. I've spent hours on the phone with them. Now I was told my check was sent back to me a while ago although I never received it! Stay far away from them!!!

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1.0

Sharebuilder

Comments about Sharebuilder:

Would not recomend share builder to anyone they have been taking me around the block to apply promotions

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4.0

The future at your control

By 

from USA

Comments about Sharebuilder:

Share builder is a great place for new investors to learn and prepare for their future, by handling their own retirement account.

Customer Service
This area does lack a little in support, however overall is not bad, the weakness is that you may get stuck waiting on the phone for a tad bit longer than most sites to speak to a rep.

Product Variety
Share builder allows you to access all the stocks that are available on the market. The one thing that is a downside to the site, is the rate of trades, you will have to pay $6.99/trade, this can at times eat into your profit, so you will want to make sure you are investing a reasonable price to get over this fee.

Ease of Use
Share Builder in my opinion is fairly easy to use, they do also offer some FAQ's to help you get started when your first starting an account with them. The thing that investors have to remember is that by using sites like Share Builder you will be cutting out the middle man, meaning that you will be investing directly into the market yourself and will be responsible for your choices.

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5.0

Easy Way To Invest in Mutual Funds and/or ROTH IRA

By 

from Pittsburgh, PA

Comments about Sharebuilder:

Three years ago, I opened up a ROTH IRA with ShareBuilder. Later, I took advantage of incentives they provided to invest in mutual funds. I've never encountered any issues and their online site makes it easy to monitor and manage these investments.

I do find investing to be a bit confusing and after I read how smart it was to invest in ROTH IRAs, I was easily able to open up a ROTH IRA on ShareBuilder.com. There are no fees and no minimum needed and it only took a few minutes to open up the ROTH IRA. (I initially chose ShareBuilder because a financial blog writer said he chose ShareBuilder.)

Later on, ShareBuilder offered a bonus to make another investment. I chose a mutual fund (almost at random) and I got the bonus and that mutual fund has done very well in the three years that I've owned it.

About 4 months ago. I added another $25K to my account in part to get the $200 bonus, but also because they offer fairly low cost funds that I think could meet anyone's needs. For example, you can invest in a fund with a target retirement date that is designed to ensure the best return based on when you want to retire. In the small print, they explain you will have to wait a while for the bonus and it did take 3 months for them to deposit the bonus into my account, but they did give me the bonus without me having to follow up or ask for it. That same bonus offer is still in effect. (You just have to enter the promo code for the bonus listed in the small print into your account.)

Customer Service
I've never needed to call customer service because the website explains everything nicely.

Product Variety
They offer balanced funds that allow you to benefit from investing in the stock market while minimizing risk.

Ease of Use
It was easy for me to invest and to see any associated fees.

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(2 of 2 customers found this review helpful)

 
5.0

Sharebuilder gets you started investing with minimal effort

By 

from USA

Comments about Sharebuilder:

A few years ago, I wanted to get involved in the stock market just to see what it was all about. I didn't want to put in a lot of money or time, so I needed something driven for a beginner like me. It has been a wonderful experience.

Customer Service
Although I have never had an issue that needed addressed by customer service, their website is set up to guide you through any questions you may have, and periodic emails keep you up to date.

Product Variety
Most stocks are ready available as part of the sharebuilder package. If you can't find a stock you're interested in, you're not looking hard enough!

Ease of Use
I didn't have a clue what I was doing when I started, but once I got on the website I found it to be simple to invest. Some of my favorite features are automatic deposits from a funding source, automatic investing when you have a set amount of money in your account, and automatic dividend reinvestment.

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(3 of 3 customers found this review helpful)

 
1.0

miserable in every respect

Comments about Sharebuilder:

After finally being fed up with their terrible customer service, trade execution etc, I finally decided to transfer my assets out. They charged me a 75$/account fee (as far as I know, the highest in the industry) and (on purpose) took the maximum time allowed by regulation to process the transfer, during which time my assets were frozen . They are also the ONLY major discount brokerage NOT to participate in the electronic clearing house, so that they can keep and use your cash as long as possible. In addition, many stocks cannot be traded, and no foreign stocks. Their automatic investment plan will always use the highest prices of the day, so you will loose 10 times what you save in commissions.
Verdict: So bad and dishonest, it cannot get any worse.

Customer Service
Miserable: Cutesy emails from "customer service" representatives who all assume that their customers are morons.

Product Variety
Many stocks cannot be traded, poorest execution in the business

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(1 of 1 customers found this review helpful)

 
5.0

really great for experienced traders

Comments about Sharebuilder:

If you know what you are doing and are confident trading stocks and options, this is the best trading platform out there today. The fees are fair and reasonable. You get immediate trade results and can set up a ton of options to time your trades. Here is the thing though, you have to know what you are doing. You will lose out if you are a novice or experimenting on here, you need to learn what you are doing first. Stocks are a gamble!

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(2 of 2 customers found this review helpful)

 
4.0

It works for Me!

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By 

from North Hanover, NJ

Comments about Sharebuilder:

I realized lately that I really need to get saving for retirement and although I do have a retirement account through work I decided to open a Roth IRA through Sharebuilder. I also opened a Money market account as they offered a 50.00 bonus for opening one. I am not a big stock market person but have been investing in some stocks and I am pretty amazed at the ones I have chosen as they are all doing quite well. I have money automatically transferred from my checking account automatically every week and I never miss it. The little bit that I transfer into these accounts is starting to add up quite quickly and saving is easy. The trade fee on buying and selling your shares of stock was 9.95 but has since been reduced to 6.95. I really like the company , the only problem I see is that when you transfer money in on the automatic plan it seems to take a week before it is cleared into your account which seems long. On the other hand you have control of what you want to buy and sell .

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(2 of 2 customers found this review helpful)

 
5.0

Best Way to Begin Investing in Stocks

Comments about Sharebuilder:

This excellent online service offers beginning investors, as well as seasoned veterans, with great tools at a low price (currently $6.95 per trade) to begin purchasing shares of stock. There is no minimum order unlike many brokerages, so you can begin with just a few shares or several hundred, your choice.

Customer Service
ShareBuilder offers all the tools of a full brokerage, but leaves the investing decision-making up to you.

Product Variety
All NASDAQ and NYSE stocks are listed. You can buy 1 share or 1,000 shares per trade, your choice all for one fee.

Ease of Use
ShareBuilder makes it easy for anyone to use their system. Don't understand a term? Click on the term, and a pop-up box with an explanation appears.

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2.0

Not for someone who lives outside US

By 

from USA

Comments about Sharebuilder:

I was happy with Sharebuilder until it was bought by ING. Then I was told because I log in from Mexico, I could no longer buy, only sell. This policy has continued under the new owner, Capital (Capitol?) One. I would like to have been able to add to several small positions as well as at least one of the larger ones.

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