Saturday, December 29, 2012

ShareBuilder's iPad App

The online broker tries to stay true to its roots while marching under the Capital One banner. It’s also getting mobile.

ShareBuilder, an online broker that encourages investors to make recurring securities purchases, has stuck to its basic premise despite four ownership changes over the past 12 years. Early in 2012, it became a unit of Capital One Financial, but you still click on sharebuilder.com to access the site and its concept is unchanged.

The Website is intended as an easy way for small investors to accumulate a portfolio of stocks, mutual or exchange-traded funds, or options over time. It automatically buys preselected items on a regular basis without account or investment minimums. You could, for instance, put $200 per month into Apple stock (ticker: AAPL), buying fractional shares. Although ShareBuilder permits active trading and has branched into new areas, its research tools and educational offerings like interactive videos, mostly are designed to help an investor decide what stocks or funds she wants on her buy list.

Its newest update is an iPad app, which it rolled out in early December. Built internally, the app lets you choose the functions you’d like to see most often, and to arrange the tiles in your own configuration. Among the features is The Wall Street Journal’s video news, which can be searched by company or industry. Quite a few other mobile apps allow customers to stream video news (usually CNBC); the ability to search, though, is pretty slick.

Dan Greenshields, president of Capital One ShareBuilder, says ShareBuilder now has about 1.3 million clients with just under $10 billion in assets, and approximately 10% of all trades are placed on a mobile device. The new iPad app, he says, “reaches further out into the marketplace.” ShareBuilder also has a mobile app that runs on Kindle, and its site can be accessed via a browser on a mobile device. However, the new iPad app offers a lot more functionality.

The iPad app is free, and those who do not have ShareBuilder accounts can do limited research without logging in. The app allows you to open an account from your iPad, which is also unusual. Mobile investing is here to stay, says Greenshields: “Desktop PCs will become the phone booths of the future.”

ShareBuilder pricing varies by program. For a $12 monthly subscription fee, ShareBuilder Advantage offers credits for 12 automatic transactions ($1 each after that), which you set up by dollar amount on a continuing basis from a list of about 7,000 stocks and funds. Advantage customers also pay a $7.95 commission for each market or limit order; each options contract costs another 75 cents.A basic version waives the monthly fee but charges more per transaction.

Capital One (COF) will launch a new online banking application, Capital One 360, in February, that will link to ShareBuilder accounts.

TRADEMONSTER CUSTOMERS who borrow from the firm to trade on margin will see a significant increase in their margin-debt interest rates, effective Jan. 15, 2013. Customers with a $50,000 balance were paying a rate calculated as the fed-funds rate plus 2.5% (currently 2.67%); that goes up to fed funds plus 5.25% (or 5.42%), which would change interest paid from $111 to $225 per month.

TradeMonster CEO Dirk Mueller explains that the firm reviewed its rates and “decided to get more in line” with other brokers. It still maintains one of the industry’s lowest rates, he notes. The change came as a surprise to some customers, who alerted us.

DO YOU WANT TO monitor your credit score without a subscription fee? Check out Credit Sesame (creditsesame.com). It gives you an extensive review of your indebtedness, aggregated credit information, comparison with peers as well as credit-score monitoring. You do need to provide an e-mail address and eventually your Social Security number.

The data come from Experian (EXPN.U.K.), one of the world’s largest credit bureaus. Your home’s estimated value is displayed; the number it showed for my house was about 30% above Zillow’s (Z) estimate. You’ll get alerts when changes occur in your credit activity, plus a lot of ideas on how to bring your payments down. Credit Sesame can keep its service free by showing you offers for mortgages and credit cards. One of the mortgage-refinancing ideas it presented to me has me thinking about making a change. Good. 

Published in Barron’s, December 24, 2012. 

Posted by twcarey on 12/29 at 04:20 PM
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Saturday, December 08, 2012

Brokers: Bye Bye Europe

Schwab, E*Trade and TD Ameritrade have cut back overseas as they contend with new regulations and taxes amid thin trading.

Charles Schwab is closing the European arm of its recently acquired online options unit, optionsXpress. That follows our recent report that TD Ameritrade (ticker: AMTD) will shut its virtual doors on all types of trading in two European countries, Belgium and Italy, as well as Australia, at the end of 2012, and E*Trade’s decision to close its United Kingdom operations. It’s a sign of the troubled times in Europe and will force traders to find new online connections.

spokesperson for Schwab (SCHW) says the closure was prompted by the firm’s ongoing strategic evaluation as optionsXpress’s operations are integrated. “After a thoughtful review of the combined international businesses, we made the decision to wind down optionsXpress Europe to strengthen and focus our resources elsewhere,” says the spokesperson. By Barron’s count, fewer than 10,000 clients are affected, a tiny percentage of Schwab’s 8.7 million brokerage accounts.

Schwab’s, TD Ameritrade’s, and E*Trade’s moves appear to fall into the category of facing the reality that trading volume—both in Europe and the rest of the world—isn’t growing, especially for equities. The sovereign-debt crisis has seriously curtailed activity on the Continent.

A TD Ameritrade executive recently explained that licensing requirements in certain nations had prompted the closures. “Getting licensed and then regulated is incredibly difficult in a number of countries,” he says. Several European countries are enacting new requirements and considering new taxes as they try to raise more revenue. The added cost, in light of thin volume, made it uneconomical to continue.

OptionsXpress Europe isn’t the first piece of the firm to be jettisoned as the consolidation moves along. In May, Schwab announced it was phasing out brokersXpress, a broker-dealer that focused on registered investment advisors. An advisor Website, RIABiz, reported that brokersXpress had 35,000 accounts, most of which were expected to be folded into Schwab’s business.

WHILE RETREATING IN certain areas, Schwab is doing what most of its rivals are trying to do: seeking new customers and encouraging existing ones to trade more.

Schwab has just opened up its more sophisticated trading platform, called StreetSmart Edge, to all of its customers. Previously, only those who traded 36 or more times per year could log onto this service. Launched this past April, StreetSmart Edge is a cloud-based application, allowing customers to move easily from one computer to another and still have access to all of the necessary features and personalized tools.

StreetSmart Edge contains point-and-figure charting, CNBC video-on-demand, and a number of slick, customizable layouts. If you set up the layout that you want on your home computer, you will see the same one on your PC system at work or elsewhere.

Says Kelli Keough, a senior vice president at Schwab: “Traders want the convenience of trading from any computer, and our use of cloud technology in the brokerage space uniquely gives our clients the same trading experience, regardless of how they access it.”

FIDELITY RECENTLY UPDATED its mobile apps, allowing customization of the home screen for iPhone, iPod Touch, and Android owners. The screen is set up with nine tiles, which you can move around as desired, displaying key market data, personal watch lists, gainers/losers, and account data. Rotating the device to landscape mode allows access to interactive charting, including the ability to overlay technical indicators or perform comparisons between two stocks. In addition, you can now manage alerts from your phone, and be notified when a trade is executed.

The iPad app was also updated, and now includes Trefis Research tools, which are designed to identify the “drivers” of a company’s growth. Another new feature for the iPad, which kept me amused for quite some time, is the new Watch List Visualization, which lets you look over the historical performance of stocks on your watch list. You set the period you want to explore, and dive into the data. You can also compare price/earnings ratio, market cap, and other measures. It is definitely worth the update. 

Published in Barron’s, December 3, 2012. 

Posted by twcarey on 12/08 at 04:18 PM
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