Capital One ShareBuilder (NYSE:
) has announced that it is reducing the price of all real-time
trades. On Friday, March 1, the company will replace its existing
price structure (both the $9.95 standard commission rate and the
$7.95 Advantage Program commission price available to those with
a $12 monthly subscription) with a flat commission structure.
From that point forward, investors will pay $6.95 for all
real-time stock, ETF and options trades, and just $0.75 per
"Our pricing, we just didn't feel it was low enough," Dan
Greenshields, President of Capital One ShareBuilder and President
and Chief Investment Officer of ShareBuilder Advisors LLC, told
Benzinga. "As a cost leader and value leader we thought that we
could go lower. We thought it was good for investors, we thought
we could simplify our structure, and eliminate some customer
confusion and still maintain our margins."
Greenshields won't say exactly how the company is able to
sustain its margins. "It's trade secrets that we'll never talk
about because they're operational efficiencies that we built from
the ground up, not unlike the formula for Coke," he said.
ShareBuilder hopes the announcement will advance its
competitive position with top tier online brokerages, such as
Charles Schwab and E*TRADE.
When the company was founded more than a decade ago,
ShareBuilder catered to novice investors. The new price reduction
signals the next stage in the firm's evolution towards courting
more sophisticated clients who trade more often and are thus more
Additionally, Greenshields said that it is very important for
ShareBuilder to deliver its service "in a simple and easy to
understand way, not a complex, institutional-type trading
"Our target is average Americans that need to save for
retirement or their kids' education or whatever goal that suits
them, and empowering them to take control of their financial
future so that they can be successful investors and not get
bogged down in jargon and tables that are detailed that are
geared toward professionals in the financial industry," he
ShareBuilder officially joined Capital One on February 17,
"We're very focused on making people successful long-term,"
Greenshields concluded. "If we really focus on the customer,
we'll be successful long-term. Capital One and ShareBuilder both
believe deeply in that."
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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