Sharebuilder: Controlling Our Own Destiny
Written: Dec 13 '04
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Pros: no minimums, annual fees only on IRAs and ESAs, low fees, easy to use
Cons: not much help transferring stocks from our old account
The Bottom Line: If you want to get started building an investment portfolio a few stocks at a time, Sharebuilder is the place to go.
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| AliventiAsylum's Full Review: Sharebuilder |
When I realized the annuity I'd been sold by an overzealous salesman was not, in fact, a "rainy day" account but more along the lines of a retirement asset where I'd be penalized for early withdrawals, I decided it was time to stop relying on other people for our financial future. I'd selected a couple of very successful stocks in the past - Disney back in 1987, Snapple back when it was an IPO - which had paid the down payment on our house as well as a good chunk of the first minivan we owned.
I first came across Sharebuilder through the numerous online advertisements. It seemed the perfect way to suit my needs. Back in 2002, I opened that "rainy day" account with them, so I'd have money I could liquidate if I needed it while at the same time I'd build up a nest-egg at a better rate than the banks were offering.
In 2004, Sharebuilder surpassed one million accounts. It was the fastest-growing online brokerage service in 2001 and 2002. It received Forbes Best-of-the-Web awards in January 2003 and January 2004. Kiplinger's Personal Finance ranked Sharebuilder #1 in "25 Ways to Invest $1,000." These statistics make me comfortable that this site will be around for a long time to come.. Sharebuilder is headquartered in Bellevue, Washington.
As with most websites, setting up starts with choosing a username and password. Next comes deciding what type of account you want. I have an individual account, but I could have set it up as a joint account. There are Traditional or Rollover IRA accounts as well as Roth or Conversion IRAs. For children, you have the choice between a custodial account or a Sharebuilder Educational Savings Account. Your personal information is transmitted over a secure server, I never had to talk to a live person and soon I had my own account.
Funding the account to buy stocks can be done in a variety of ways. I usually perform an electronic transfer directly from either our checking account or a savings account in the case of the kids. I could also arrange to have a direct deposit from my paycheck through my employer, or wire money directly to Sharebulder. When I recently cashed out my IRA with Morgan Stanley Dean Witter, the total was over the yearly allowance so I had to send check to Sharebuilder along with a form I printed directly from the website.
Once the money is in the account, it's time to trade. In my case, I already knew I wanted Qualcomm stock. It was very easy to search for the stock ticker symbol. For this account, I chose the option of paying just $4.00 per automatic trade on the Sharebuilder Basic plan. Additional charges here are $15.95 for real-time trade market orders and $19.95 for real-time trade limit orders. IRA accounts under this plan are subject to a $25 annual administrative fee (still much lower than the $65 at Morgan Stanley Dean Witter) and Educational Savings Accounts are subject to a $15 annual administrative fee.
Other plans with Sharebuilder include the Sharebuilder Standard plan. With this plan there is a $12 per month subscription fee. However, you are permitted six automatic trades under this plan, with each additional trade after six costing just $2. Real-time trade market orders are $14.95 each and real-time trade limit orders are $18.95 each. In addition, this plan gives you access to Sharebuilder's gain and loss tracker. I've done fine using Microsoft Money in this regard, so that’s not an urgent need for me.
The Sharebuilder Advantage plan is available for a $20 per month subscription fee. With this you get 20 automatic investments included every month and each additional is just $1.00. Real-time trade market orders are $11.95 each and real-time trade limit orders are $15.95 each. In addition to the gain and loss tracker, under this plan there is access to a portfolio tax tool as well as an IPO notification.
As a small investor, I am fine with the Basic plan. The fees listed are for each account, and with three custodial accounts, two IRA accounts and one individual account now with Sharebuilder, paying a per month fee would soon start adding up.
Automatic investments can be set up to occur one time or at regular intervals. I usually invest once per month. I've built up a nice nest-egg in the account I started two years ago. By watching the research at Sharebuilder as well as the various boards out there I've only lost money on Krispy Kreme. All of my other stocks have performed consistently well. Stocks I am interested in I can put on a "watch" list and keep an eye on them for a few months if my research hasn't convinced me to buy right away. Each month I get notification that my account statements are available online. There is no correspondence sent through the mail. Even my annual tax forms are printed from the website.
Should I want to withdraw funds, that is also done on the site wither through an electronic transfer to a savings or checking account (which doesn't incur a fee), having a check mailed ($5 fee), or a wire transfer ($30 fee).
When I log onto my account or my husband's account, we're brought to an account overview which gives me a summary of the total value of my stocks as well as the cash balance (if any). In the middle near the top of the page is a drop-down menu which allows me to switch between accounts. If I want to look at my individual stock positions quickly without having to open my Microsoft Money program, I can do that and see the current quotes, the daily change, and the market value of my shares. There are also prompts for buying, selling, or depositing money to the account along the way.
My only complaint about Sharebuilder came when I was recently closing all of our accounts with Morgan Stanley Dean Witter and I wanted to transfer the stocks in my children's accounts directly to Sharebuilder. I filled out the forms I printed out from the site, had them notarized, included the most recent statement of the account, and sent it off. I had looked up each stock symbol in the research section and it didn't seem that I would have a problem transferring any of them. Sharebuilder posted a message on my accounts when the paperwork was received. Two days later, I had a message posted that they could not transfer all of the stocks and therefore my transfer was cancelled. My paperwork would not be returned to me. It did not specify which stock the problem was with, so the suggestion that I transfer part of their holdings to Sharebuilder didn't help since I didn't know where the problem was. I called customer service, but I got transferred twice and gave up. Instead, we sold all of the stocks and ate a 10% commission. I found trying to do this to be very difficult as well as frustrating since I was working against a deadline of incurring additional fees.
Overall, however, I am very happy with our investments now being held at Sharebuilder. I have more access to my accounts and more control than ever before, as well as not incurring large fees for the "privilege" of investing with them.
© 2004 Patti Aliventi
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Member: Patti Aliventi
Location: Mount Washington Valley, New Hampshire
Reviews written: 2083
Trusted by: 689 members
About Me:
Now writing reviews to pay for the "out of network" costs of our health insurance...
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