Planned Investments: ShareBuilder, SogoInvest, and MyStockFund

The first planned investment service I have heard of and used was ShareBuilder, which was also the only brokerage other than Scottrade I used back in March 2006. The reasons I decided to open an ShareBuilder account (eventually, I got three of them for both me and my wife) were:

1. Promotion bonuses: I collected a total of $155 of bonuses with three accounts;
2. Low commissions: $4 per scheduled trade is quite low compared to what Scottrade charges me ($7 per trade);
3. Commission rebates: Since I signed up the account through Costco, I get 25% quarterly rebate on commissions which reduces the commission from $4 to $3 per trade.

Since then, I have noticed that there are at least other two firms also offer planned investment services: SogoInvest and MyStockFund, and used QQQDirect, a division of MyStockFund, later last year to make fee-free monthly purchase of QQQQ. So how are the two alternative planned investment services different from each other? Let’s take a look.

MyStockFund

MyStockFund offers three fee-based planned investment services (fees can be paid by credit cards) and all planned purchases are made on Thursdays, which is similar to what ShareBuilder offers.

• Basic plan: $5.98/month that includes 2 purchases, plus $2.99 for additional purchases
• Flex plan: $59.99/year for $1.99/purchase
• Diversified plan: $39.99/year for $0.99/purchase, plus $9.9o monthly fee which include 10 free planned purchases
• Real-time orders: $12.99 for both buy and sell
• Dividend reinvestment: Free
• Inactivity fee: None
• Account transfer out: $50, another $50 for close account and transfer shares out
• Close account: $50 plus $12.99 real-time sell charge
• Fractional shares: Yes
• Account minimum: No
• Account funding: Electronic
• Retirement accounts: No
• Incentives: Use promotion code SMDIRECT to get 5 planned purchases each month for a flat monthly rate of $4.95 for a year with the first month free
  

SogoInvest

In addition to two subscription based automatic investment services, SogoInvest also has free service with low commission. And their automatic investment is much more flexible than those of ShareBuilder and MyStockFund. Besically, the automatic investments can be made on any given days.

• Bronze plan: $3 flat fee for both automatic purchases and real-time orders, no monthly fee
• Gold plan: $10/month subscription fee that includes 5 commission free automatic investments, $2.00 per order for additional purchases and real-time orders
• Platinum plan: $15/month subscription fee that includes 15 commission free automatic investments, $1.00 fee for additional purchases and $1.5 for real-time orders
• Sell: Real-time fee applies
• Dividend reinvestment: Free
• Inactivity fee: None
• Account transfer out: N/A
• Close account: N/A
• Fractional shares: Yes
• Account minimum: No
• Account funding: Electronic
• Retirement accounts: No
• Incentives: $1 per trade for the First 90 days for both real-time and automated trades

A quick comparison of ShareBuilder, MyStockFund, and SogoInvest shows that SogoInvest offers the lowest commissions for both the schedulded and real-time trade, buy or sell. However, the biggest drawback is that it doesn’t offer dividend reinvestment. On the other hand, if you plan to buy stocks or ETFs more than once every month, then the basic plan from MyStockFund seems to be a better choice than ShareBuilder’s basic plan which charges $4 per trade. If you are looking to purchase stocks or ETFs in an retirement account with low commission, then ShareBuilder is the only place to go, at least for now, as the other two don’t offer retirement accounts.

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