Do a Google search for “Sharebuilder” and the first hit is the site for Capital One Investing. Mistake? No, just an interesting history. The underlying platform of today’s site began in 1996 as NetStock Direct during the very beginning of the online brokerage age. Then came a name change to ShareBuilder, where the company attempted to differentiate itself from its peers by focusing on steady, automatic investments at lower commission rates. After being purchased by ING Direct, the company was most recently acquired by Capital One Financial Corporation.
The culture of automatic investments continues to this day on the Capital One Investing platform, with PortfolioBuilder joining ShareBuilder as helpful programs for novice and passive investors and cost saving methods of investing for all.
ShareBuilder New Account Setup
Although the Capital One parent company maintains locations across the country, these banks do not service investment customers beyond advisement services or simple questions and answers. New customers will have to sign up on the website.
Potential investors will see two options on the home page: “work with an advisor” or “invest on my own.” Those who choose to go the advisor route will need a minimum $25,000 nest egg to begin, and fees start at 0.9% annually. The majority of Capital One Investing customers take the other road.
Personally managed account types include Individual Accounts, Joint Accounts, Traditional and Roth IRA accounts, Custodial Accounts, and Education Savings Accounts. Also available is the option to apply for options trading or a margin account. This article is limited to a personally managed individual account with options trading.
There are no fees for opening an account, and no account minimums required to get started with a personal account. At the time of this writing, Capital One Investing is offering a $50 bonus with a minimum $5,000 investment, which increases up to $600 with a $200,000 investment.
An account with Capital One allows an investor to purchase a variety of stocks, ETFs, and mutual funds. Real-time stock and ETF trades carry a commission of $6.95. Options may be traded after receiving approval for the same fee, plus an additional $0.75 per contract. Both of these prices are in line with other mainstream discount brokerage firms.
Capital One Investing accounts may buy into a wide range of mutual funds, with offerings from 36 different companies. Recognizable names such as Vanguard, Janus, and PIMCO populate the list of available products alongside other less well-known firms. Mutual funds vary in commission and minimum investment, but as an example, to get into Vanguard’s Equity Income fund (VEIPX) requires a minimum $3,000 initial investment coupled with a $19.95 fee. Additional investments for this particular fund are available anytime with a minimum $100 contribution. For investors looking for automatic investing or simplify diversification, Capital One Investing offers two proprietary products designed to differentiate themselves from their competitors.
ShareBuilder is the brand name for Capital One’s automatic investment program. The site allows you to set up recurring trades at a weekly, bi-weekly, or monthly frequency. The platform will automatically execute your trades on the scheduled date while charging a reduced commission of $3.95. All trades execute on Tuesday, and you can make changes to your plan the prior week. There are no minimum transaction amounts associated with this feature.
While ShareBuilder is simply a tool for knowledgeable traders to plug in their orders and walk away, PortfolioBuilder is a more interactive platform designed to create instant diversification with minimal commissions or research. This is arguably the most novel feature of the entire site, and is very well executed.
To start, the customer selects a risk profile for themselves. After establishing their tolerance for volatility, PortfioBuilder then presents a group of 6 to 8 investment types weighted to match the objective of the investor. A dropdown list of matching ETFs appears for each category, complete with past performance statistics as well at the gross expense ratio, side-by-side with competing ETFs for easy comparison.
One you pick the total amount you would like to invest and approve the allocation across your selected funds, Capital One will execute the entire trade for one price of $18.95. You may add to or sell out of your position at any future date for the same commission.
ShareBuilder IRA Review
In addition to the ability to open a Traditional or Roth IRA, free retirement advice is provided to all Capital One customers. Their flagship tool is called Retire MyWay, and offers a projected monthly revenue based on several inputs. The assumptions are fairly generous, but for a free tool this is a decent way to perform a quick retirement health checkup to be taken with a grain of salt.
Research, Guidance and Education
The website features a very rich set of features designed for a wide range of investors to research potential investments. Their tools rival those of other sites, and between the screeners, personalized watch lists, and Morningstar reports, most people will find more than what they need here.
The guidance tab is the gateway to a real human financial advisor who will, for a fee and minimum account balance, actively manage your portfolio. Capital One Investing does not push this on you, and nothing is behind a paywall, so this is just available for those who want the option.
The education tab features a surprisingly comprehensive and well executed library of articles going into a diverse range of finance topics. Articles are geared toward novice and veteran investors alike, and cover a wide body of knowledge. With article titles like “How to Create an Income Stream” and “Dollar Cost Averaging”, there is something for everyone in this collection. Articles are well written and unique to Capital One, not simply links to other sites. They include realistic hypothetical examples and easy to understand explanations. This is a great bonus feature of the site.
ShareBuilder Website/Trading Platform/Tools
The website is well designed and easy to navigate. Opening a trading account is fast and easy. If linked to a Capital One bank account, funds can be
instantly transferred to and from a brokerage account.
The rudimentary trading platform is easy to use but not designed for active or sophisticated traders. Tabs for ShareBuilder and PortfolioBuilder are
shown on the Investing toolbar, and traders can quickly choose between placing stock, option, or mutual fund trades. Trade confirmations are
sent immediately via email, not the next day as with many other brokers.
Capital One offers a mobile app for their Investing product, but it is distinct from the app for credit cards and bank accounts. The standalone app is full-featured and includes the ability to make trades or initiate transfers, in addition to the expected functionality of viewing your portfolio or order status. The interface is well designed, and the trade window especially is straight-forward and clean. Absent from the list of features is the ability to edit or create automatic investment plans, or utilize the deep research features available on the desktop site.
- No minimum investment to open an account
- No minimum balance or maintenance fees
- Low cost automatic investment plan through ShareBuilder
- Easy, cost-effective portfolio creation with PortfolioBuilder
- Free DRIPs
- No-fee IRA
- Banking services available through parent company Capital One
- No extended hours trading
- No short selling allowed
- Trading tools are basic
- $49.95 early redemption fee on NTF mutual funds held less than 90 days
- $0.007/share surcharge for stocks or ETFs priced under $1.00
- Limited news and research sources compared with other leading brokers
- Automatic investing plan trades are only made on Tuesdays
ShareBuilder Review Summary
Capital One Investing occupies the crowded marketplace of online brokerage firms. While competitive on fees and services, Capital One Investing
distinguishes itself through its automatic investing tools. The company encourages customers to get on an investment plan by rewarding them with
lower commissions for pre-arranged trades. This feature of the site is geared toward beginner or passive investors looking to grow their portfolios
slowly and over time, primarily through ETFs.
Active investors, however, will not be happy that the company does not offer extended hours trading or short selling. The lack of a powerful, comprehensive
trading platform is not helping as well. There is not much that would attract mutual fund investors either, since commission rates
are about average and Capital One only offers around 400 NTF mutual funds (Scottrade, for
example, has over 2,600 NTF funds).
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