Capital One Investing (Capital One) began as NetStock Direct in 1996, which then changed its name to ShareBuilder Securities Corporation. ShareBuilder was purchased by ING Direct in 2007, before being bought by Capital One Financial Corporation in 2012. The parent company renamed ShareBuilder as Capital One Investing.
The company's strengths are competitive commission rates and a few unique products and services. One is their PortfolioBuilder feature, which allows customers to purchase up to eight ETFs at a time based on their investment amount and preferences. ShareBuilder is a program for small investors to invest any set amount of money on a regular basis to take advantage of dollar-cost-averaging.
Capital One offers only basic investment products such as stocks, ETFs, mutual funds, and equity options, so investors who want to trade fixed-income investments, currencies, or futures should consider other brokers. They also offer professional advising services both over the phone, and in person at a limited number of Capital One Bank branches.
- $6.95 commissions on stock and ETFs
- $6.95 + $0.75/contract commissions on options
- $19.95 commissions on mutual funds, but $0 for more than 400 No Transaction Fee (NTF) funds
- $19.95 commissions for broker-assisted trades
- $3.95 per investment for ShareBuilder trades
- $18.95 for an entire portfolio in PortfolioBuilder
- No minimum investment to open a cash account; $2,000 minimum to open a margin account
- No inactivity or annual maintenance fees
- Mobile trading on smartphone apps
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. A positive feature is trade confirmations that are sent immediately via email, not the next day as with many other brokers.
Research features include customizable interactive charts, heat maps, and a basic investment screener that can use popular searches or a customer's own parameters. Another interesting, if not particularly useful, tool is the What If I Had Invested feature. This lets a trader see how a stock might have performed if you had bought that stock on a past date.
Research sources include Morningstar ratings and reports as well as Markit Research Team Consensus reports, which combine ratings and analysis from up to 13 research providers in one easy-to-read package.
The website's Knowledge Center contains a wide variety of articles on investing topics for beginner, intermediate, and advanced experience levels. Capital One also addresses investor experience by offering personal advice or vehicles like the ShareBuilder Investment Plan for beginning investors, PortfolioBuilder for intermediate investors, or self-directed investments through individual securities using its full array of research tools.
Other features offered by Capital One include Dividend Reinvestment Plans (DRIP), which are available at no cost and can be set up quickly after a purchase has been made, and small business 401(k) retirement plans that use the ShareBuilder funding and commission structure. Of interest to customers who are also members of Costco is a discounted commission schedule that offers substantial savings on ShareBuilder and PortfolioBuilder investments along with a $1 discount for stock, ETF, and options trades.
- 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 (Capital One 360 promotions)
- No extended hours trading
- No short selling allowed
- Trading tools and trading platform are only rudimentary
- $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 is geared more toward beginning investors or buy-and-hold types who aren't experienced or trade actively. Securities offered are limited to stocks, ETFs, options, and mutual funds. The trading platform is weak, and trading tools, news, and research sources are simplistic and limited in scope.
Low commissions and $0 minimum balance requirement for cash accounts are attractive to beginners, as well as a wide variety of educational articles. The ShareBuilder and PortfolioBuilder plans will appeal to new or inexperienced investors as well. The low commissions on these two products make them a compelling alternative for investors wishing to utilize dollar-cost-averaging or construct a basic portfolio using ETFs as the base investments and not paying additional management fees.
Active investors won't like the inability to trade after hours or short sell. The lack of a powerful, comprehensive trading platform will deter active investors as well. There is no particular feature that would attract mutual fund investors either, since commission rates are about average and Capital One only offers about 400 NTF mutual funds.
Capital One is recommended only for those investors looking for low-cost automatic investment vehicles and/or cheap, easy portfolio building. Active and sophisticated investors are advised to consider other online brokers.
Reviewed by Brokerage-Review.com on
Reviewed by Editor and ShareBuilder customers.