Capital One Sharebuilder bought by E-Trade

[Sallyr70]

I knew about this a few months ago, but didn't think too much about it. Figured it would be like when ING sold to Cap One; nothing changed. Today, received another email about the transition. I'm worried because E-trade's fees seem higher. Thinking about switching to another company, but who? I have a Roth IRA.

Here's what I love about Sharebuilder:

My monthly subscription (grandfathered in from ING days) is $12/month and I get up to 10 buys/month. (Selling shares is $6.95)

I can buy fractions of a share.

It sounds like E-trade will not be honoring the Sharebuilder subscriptions, so I'd start paying $6.95 per trade, either buying or selling (so I wouldn't have the flexibility to put small amounts of money into several stocks or ETFs) , plus there's a yearly percentage fee... ? Is that correct? Geez that will cost a lot more! Plus, all the fraction shares will be sold prior to the changeover. I have partial shares in a few stocks with a high $/share such as Amazon and Netflix. I don't wanna sell those right now!! I see some people recommending Vanguard. I just don't know what to do.

[Jluke]

Thanks - I am in the same boat as you. I've been a customer since 2003 (sharebuilder at that time). Roth IRA, Taxable, and a Custodial Account for my son


if you switched to Vanguard (or pretty much any other of the major financial groups) they would do the same with your fractional shares - liquidate them.


I guess I will be getting some extra cash and have to do some work at tax time...

Remains to be seen what I will do but I will probably let E Trade take care of the fractional shares...

I hope you got your money's worth on the $12/month fee...

E Trade email also noted that you can make purchases of no-load, no transaction fee mutual funds.

You won't have any tax consequences from selling partial shares b/c it is a Roth IRA

[Jluke]

just looked at my taxable holdings... think I might need to do some buying and eat the $3.95 fee/purchase so I can get on the other side of the whole shares... otherwise I would get about $2400 in cash.

0.7034 (need to buy fractional)
0.9704 (need to buy fractional)
0.9486 (need to buy fractional)
0.3832 (no action; let them sell)
0.9441 (no action; let them sell)
0.5469 (Sold this position entirely, gain was 2k or so)

[Sallyr70]

I found a company called Firstrade that sounds promising. Trades are only $2.95 and they have a bonus for new or transferred accounts: for my account value, I could get $300 cash, plus 500 free trades (within 60 days), and they pay you back for any account closing fees. Not as well-known as Etrade, Fidelity etc but decent reviews.

There are other bonuses, like for Ameritrade and E-trade (if you don't do the automatic transfer thing), but the trade costs are more.

The 12/mo subscription was so awesome.... it used to be 6 trades per month, now it's 12. It's been so great for dollar cost averaging... bummer we'll be losing that.

[james.hendrickson]

just looked at my taxable holdings... think I might need to do some buying and eat the $3.95 fee/purchase so I can get on the other side of the whole shares... otherwise I would get about $2400 in cash.

0.7034 (need to buy fractional)
0.9704 (need to buy fractional)
0.9486 (need to buy fractional)
0.3832 (no action; let them sell)
0.9441 (no action; let them sell)
0.5469 (Sold this position entirely, gain was 2k or so)

I'm hearing Etrade won't transfer the fractional shares. You'll get cash instead.

[Jluke]

I'm hearing Etrade won't transfer the fractional shares. You'll get cash instead.

exactly. i am going to buy partial shares tomorrow for AAPL, GOOG, and GOOGL to get me to the next whole number of shares. doesn't help that Alphabet reported earnings after the close today.

I'm doing this for tax savings - if I didn't I would have upwards of 2400 in taxable gains just from these partial shares being liquidated.

If I pull this off I will have $14 from those 3 combined and another $80 from two other holdings that I'm not going to bother buying up to the next whole number. so $100 vs $2400 in taxable with this maneuver.

update coming on Tuesday after the transaction occurs.

[Jluke]

[...] I can get on the other side of the whole shares... otherwise I would get about $2400 in cash.

0.7034 (now have ----> x.0447)
0.9704 (now have ----> x.0057)
0.9486 (now have ----> x.0080)

got lucky with my fractional purchase today...

now those 3 will only have about $20 for taxable income when I am forced to go to a whole number of shares.

[MooseBucks]

I closed my sharebuilder account out about 2 years ago and went to Merrill edge because I get free trades due to my overall balances with them. The part I missed was being able to buy the fractional shares but looks like that’s gone now too.

[Gailete]

For some reason I haven't seen anything about this, only heard about it from my son. The nice thing was getting reinvested dividends that never come out to a whole number, but they kept growing. I guess I need to look into all this. I have been with them since they were ING, but never had the SB deal for $12 like you did.

Guess that will be my project today after paying the bills. To make some sense of this. When is it happening?

[Gailete]

So I was on the site and tried to find out about the switch over since I haven't received a single memo about it, and when I finally found something mentioning it, it was basically a blurb on it is happening in the future and we will let you know more about it later.

What I don't understand is how E-trades works with dividend reinvestments. You are pretty much guaranteed fractional shares. Do they plan to cash them out each time they are paid out? I don't understand why with handy dandy computers, that having fractional shares is such a burden.

[JBinKC]

I have a strong feeling the rate of return for cash balances will go back to virtually zero with Etrade. So to earn a return on idled cash either will lock up your money buying 4 week treasuries or cause larger transaction fees. Very few brokerages offer a transaction free money market account on cash sweeps that pay a fair return.

One thing I hate about brokers is the hidden fees they don't disclose that you end up finding out later. It's usually prevalent with ownership of foreign securities or low priced stocks.