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I posted the following on the Discount Broker board, but maybe you can help me here.

I currently have an account with Scottrade, and everything has been working just fine. The thing is that I invest small amounts of money and a $4 transaction fee seems a little better that $7 from Scottrade. At the same time, I was thinking of transfering my banking operations to ING Direct (which owns ShareBuilder), and I believe the transfers to the brokerage account would be even faster.

So the question is if ShareBuilder works as smoothly as Scottrade, and if the transfer of my investments from one firm to the other would be too complex.


Thanks and fool on,
fvh
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The thing is that I invest small amounts of money and a $4 transaction fee seems a little better that $7 from Scottrade.

I have an account with both, although I don't much like Scottrade.

The thing you want to look at is the whole picture, not just the commissions.

For instance, I started out with ShareBuilder (SB), planning to only make $4 automatic investment trades. I liked that they allowed fractional share purchases, that they allowed no-cost reinvestment of dividends (I wanted to pseudo-DRIP initially), and they paid a decent return on my cash-on-hand. Scottrade (ST) doesn't allow fractional shares, I don't think they allow reinvestment of dividends, and they pay a pittance on cash in the account.

OTOH, ST allows you to buy lots of mutual funds, whereas SB only allows investing in ING Direct funds.

Now, I find that I like making limit-order purchases. It turns out that just after I opened the ST account, ING bought SB and lowered the real-time trading commissions from about $15.95 to $9.95. I did the math, and figured that with the extra interest I'd earn on my cash in the account, I could make a fair number of $9.95 trades at SB vs. $7 trades with ST, and still come out ahead. I also like the user interface better at SB. But that's just me.

ShareBuilder also posts deposits you make much faster -- usually the next day. Scottrade always puts a 3-day hold on the funds, even if they've cleared the bank sooner than that. I don't like that. A transfer I made from my bank account cleared within hours of requesting it through my ST account. It still didn't post to ST for 3 days.

Transferring your stocks from one to the other shouldn't be difficult. I haven't done it yet (I plan to transfer my ST over to SB soon), but the process is relatively painless. It will take 2-3 weeks to complete, I think, but you can transfer your stocks intact. Any cash will have to be sent to you via check by snail mail. (I've done that, and it was actually handled easily and quickly.)

What you might consider is opening a ShareBuilder account and using it for awhile, without closing your Scottrade account. See which you like better. Then go with the one that suits your needs the best.

Best regards,
Kathie
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Thanks Kathie,

That was a very detailed reply.

I'll go ahead and open the SB account and see how both work.

Thanks again,
fvh
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Kathie,

One more question regarding SB. I read the pricing information and it said that no annual maintenance fee was due for the standard and advance accounts. That means that Basic accounts are charged an annual fee? How much would that be?

Thanks,
fvh
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No annual or monthly fee for the Basic account, but the other 2 do have a monthly fee.
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That means that Basic accounts are charged an annual fee? How much would that be?

There isn't an annual fee for taxable accounts, but my Roth (Basic plan) incurs a $25 annual IRA admin fee, payable in July (for my account).

However, if I upgrade for that one month to Standard, at $12 for the month, they waive the IRA admin fee for the year. So I upgrade, pay the $12, and look at any auto invest trades I want to make that month as "commission free" and figure I'm getting the annual fee at about 50% off.

Works for me.

Best regards,
Kathie
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Kathie,

I use the same approach to waive the $25 fee. I noticed on my Sharebuilder account the following note in the pricing program details. My fee is in July and I need to call Sharebuilder about this.

>>You are currently subscribed to the Basic special offer. If you change your pricing program, you will not be able to change back to the Basic special offer.<<

Thanks,

Jim L.
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>>You are currently subscribed to the Basic special offer. If you change your pricing program, you will not be able to change back to the Basic special offer.<<

Yes, I had seen that, too. However, I keep forgetting to call them about it. In looking through other links on the site about the IRA fee, it still states in one of them (and this is a direct paste from their site):

The administration fee will be waived if you are enrolled in either the Standard or Advantage Pricing Program during the month the administration fee is charged.

I assume that the message you refer to means that you can't go back to the Basic pricing plan during that same month. But I need to call them to verify this.

Best regards,
Kathie
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I opened a ticket with Sharebuilder and received this reponse from their customer service.

>>I do sincerely apologize. This is an error in the verbiage that is listed on the ShareBuilder website. You will be able to upgrade/downgrade at any time that you would like to.<<


Thanks,

Jim L.
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