Saturday, July 17, 2010

A Bank With a Unique Broker Niche

EverBank’s online-brokerage services aren’t cheap, but they include an intriguing way to park cash in nondollar investments.

BANKING GIANTS LIKE Wells Fargo and Bank of America aren’t the only ones offering online-brokerage services. Consider EverBank (http://www.everbank.com), which has been around for a decade, but just made it onto our radar.

Like most banks, the Jacksonville, Fla., lender doesn’t push the envelope on broker technology and pricing. For example, you’ll pay $10 a month for streaming real-time quotes, which are free to customers of most online brokers. However, EverBank does have a few tricks up its sleeve that can make it worthwhile for those interested in foreign currencies or precious metals, two areas that have gained more investor attention amid volatile equity markets.

A recent upgrade added Financial Manager, which is an account-consolidation tool powered by Yodlee. This allows you to view non-EverBank assets and liabilities, providing a more complete balance sheet. Using Yodlee’s secure log-in, customers enter their user IDs and passwords from other financial sites, such as those of brokerages, credit-card firms, and lenders, and the Financial Manager draws a more complete picture.

Says Jane Dulle, a senior vice president at EverBank: “One of our key value propositions is that customers can use our checking and money-market accounts to park their uninvested cash, and get a view of what’s going on with all their accounts at once.”

WORLD MARKETS IS EVERBANK’S specialty-business line, allowing clients to hold foreign currencies at relatively low minimums, as well as foreign-denominated money-market accounts. There are approximately 20 currencies available for money-market accounts, along with certificates of deposit (CDs). The bank also creates and sells index CDs that are set up along themes, such as petroleum countries or emerging markets.

EverBank also permits customers to hold gold or silver through its World Markets offering. You can buy “allocated” or “unallocated” metals. Allocated metals are owned directly by the investor, in the form of coins or bars held in custody by the bank. Unallocated metals aren’t owned directly by the purchaser, but have lower minimums and no storage fees.

Dulle says most of EverBank’s brokerage customers started out with a bank account, then opened a brokerage account for the convenience and the international products. Opening an additional account once your first one is in place requires only the filling in of a few fields. It takes just a few seconds.

One caveat: The bank’s brokerage fees are higher than average, especially after all the discounting throughout the industry earlier this year.

Domestic stock transactions are $10 per trade for up to 2,000 shares. Larger trades run an additional one cent per share. Options fees are also high–a base rate of $14.95 for online transactions, plus $1 to $1.50 per contract. Mutual funds can be purchased only with the help of a live broker, for $25 per trade.

Would I move all of my accounts here? I doubt it. This isn’t a site that will be useful for an active trader, especially one interested in options. I find the World Markets offerings intriguing, however, as a place to park excess cash in non-dollar investments.

The bank’s account-consolidation feature can be helpful, as well. I’ve been testing Mint (http://www.mint.com) for a couple of months and have some quibbles with the way it presents its reports. EverBank’s Financial Manager is more easily customized. 

Published in Barron’s, July 12, 2010

Posted by twcarey on 07/17 at 12:53 AM
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