3-star brokerage firm rating

Vanguard

3-star brokerage firm rating

ShareBuilder Review

ShareBuilder vs Vanguard



Vanguard vs ShareBuilder: Commissions and Investments 2012



Vanguard


ShareBuilder

  • Stocks and ETFs: $7 for the first 25 trades, $20 for subsequent trades for account with less than $50,000
  • $7 for account with $50,000–$500,000 (Voyager Services®)
  • $2 for account with $500,000–$1,000,000 (Voyager Select Services®)
  • Free for first 25 trades, $2 for subsequent trades for account with $1 million (Flagship Services™)
  • Options: $30 plus $1.50 per contract
  • Options for accounts with over $1 million: $8 + $1.50 per contract
  • Mutual funds: Vanguard mutual funds - free. All others - Standard: $35; Voyager® and Voyager Select®: $20; Flagship®, $8
  • Certificates of deposit (CDs): Purchase: $5 per $1,000, Minimum: $50. Sale: $35 per transaction
  • Commercial paper: $50 per transaction; minimum purchase: $100,000
  • U.S. Treasury: $0.75 per $1,000 face amount, $40 min–$75 max
  • Mortgage-backed securities: $50 per transaction; GNMA minimum purchase: $25,000
  • Investment products: stocks, options, mutual funds, bonds, CDs, foreign securities, insurance, commercial paper, ETFs
  • Minimum to open Vanguard account: $3,000
  • All Vanguard fees

  • Stocks and ETFs Basic plan: $9.95 real-time trades; $4 per Automatic Investment
  • Stocks and ETFs Advantage plan: $7.95 real-time trades; first 12 Automatic Investment per month included, $1 per additional investment
  • Advantage plan comes with $12 monthly fee
  • Options: Basic plan - $9.95 per online trade + $1.25 per contract; Advantage plan - $7.95 per online trade + $0.75 per contract
  • Mutual funds: $19.95 for 170 no-load funds from leading no-load mutual fund families; 70 free funds including the ING mutual funds
  • Investment products: stocks, options, mutual funds, ETFs
  • Minimum to open Sharebuilder account: $0
  • All Sharebuilder fees




Vanguard vs ShareBuilder: Pros



Vanguard


ShareBuilder

  • Low cost and good performance Vanguard mutual funds
  • Free Vanguard ETFs
  • Free dollar-cost-averaging transactions for no-fee mutual funds. $3 per transaction, minimum purchase $100, minimum two transactions, for transaction fee mutual funds.
  • Free dividend reinvestment
  • No ACAT fee

  • Very low Automatic Investing Plans costs
  • Free dividend and capital gains reinvestment
  • Ability to buy fractions of a stock
  • $0 to open cash account, $2,000 for margin account




Vanguard vs ShareBuilder: Cons



Vanguard


ShareBuilder

  • High commissions in many cases
  • $20 annual maintenance fee for regular accounts with balance less than $50,000
  • $10 monthly Low Balance Fee for accounts with $2,500 or less
  • Poor trading and research tools
  • $3,000 minimum to open account is somewhat high

  • Real-time trades at $9.95 are expensive
  • $0.007 per share surcharge on real-time trades on penny stocks (subject to a maximum of 15% of the principal amount of the trade, but no less than the base commission)
  • Customers can't specify at what price investments with Automatic Investing Plans are bought/sold
  • Very basic trading tools
  • Customer service complaints
  • Terrible executions
  • Few mutual fund choices
  • No beneficiary option (important for customers with families)




Vanguard vs ShareBuilder: Comparison Summary



ShareBuilder (ShareBuilder Review) is one of the few brokerage firms offering cheap automatic investing plans. This is ideal for people that don't believe that you could time the market or don't have time to follow it and are looking to dollar-cost-average their investments by arranging to have a set amount invested daily, weekly, biweekly or monthly. But if you want to buy stocks real-time then you are out of luck: ShareBuilder charges $10 per trade and the firm's trading tools are terrible.

Vanguard (Vanguard Review) is one of the most expensive brokerage houses with very high commissions across the board. The firm even has $20 annual maintenance fee for regular accounts and $10 monthly fee if account balance is below $2,500! Vanguard is known for poor customer service and sub-par trading tools. The only real advantage the firm has is its own low-cost family of mutual funds. But even these are being replaced in investor portfolios with cheaper and easier to trade exchange trading funds (ETFs).

Due to high real-time commissions on buying stocks and ETFs, and some of the worst trading tools among brokerage firms, we can't recommend either one of these companies. There are other Top Rated Brokerage Firms with much lower commissions and excellent services.

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