ShareBuilder to Zecco: The Surprises

Just as I was about to abandon the idea of transferring my ShareBuilder account to Zecco* (Zecco asked me to resubmit the account transfer form, which I didn’t do), the process made a dramatic turn yesterday and now it seems that things are pressing ahead as they should be.

A trade confirmation email from ShareBuilder reached my mailbox yesterday and I was quite surprised because I have stopped the investing plan last month. So I logged into my account to check what exactly it is.

sharebuilder_trade.png

Did you see what I see?

Yes, the commission for liquidating the 0.6586 share is $0! Previously, I thought they would charge me $15.95 for selling the partial shares, which can’t be transferred, in real-time trading, making the total cost at $65.95. However, this confirmation told me I was wrong in making that assumption. Further, in an accompanying note, ShareBuilder details on what’s going to happen next:

Additional information about your message.

Your transfer has been approved and is now in process. For a detailed listing of the steps taking place and a time frame, please see below:

Your transfer request has been approved and is currently in process. Please be aware that the ShareBuilder transfer process is a manual one and as such, your transfer will take approximately 30 days.

Following is a list of the steps that you are likely to see in your account. This list can vary depending on individual positions that your account holds.

  • Today All partial shares liquidated
  • Transfer fee of $50 is taken from account
  • Account is frozen to allow an accurate transfer to take place 15-30 days
  • Transfer of whole securities to receiving brokerage is completed 30 days
  • A check is issued and sent to receiving brokerage with remaining cash balance (if applicable)

Note: The check is sent via regular US mail and may take a few days to reach the receiving brokerage.

As there are many steps ShareBuilder must take to ensure a complete and accurate transfer, we do not have a way to speed up or give priority to an individual transfer. Please allow the full 30 days for the transfer to process. If you have not seen the steps take place within 30 days, contact Customer Care.

There’s no mention of the Medallion Signature Guarantee at all. I wonder what happened to the previous message, which says the transfer can’t be completed because I didn’t provide the required document.

Since it doesn’t require any action from me now, I will just let it proceed.

Update: ShareBuilder’s website has more information on account transfer out on their Help page (Help -> Help Topic -> Transfer Account Asset -> How do I transfer assets out of my ShareBuilder account), which indeed says an Medallion Signature Guarantee is needed for manual processing. Regarding the fee, it also says:

There is a fee of $50 for a full account transfer to another brokerage. This includes the transfer of all whole shares of securities held in your ShareBuilder Account, the liquidation of any partial shares (as needed), and the transfer of the money market cash balance.

Thanks Richard!

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12 Responses to “ShareBuilder to Zecco: The Surprises”

  1. Richard |  Jul 12, 2007 at 11:47 am

    This is true… the $50 transfer out fee covers EVERYTHING (transfers + liquidating partial shares, etc). And yes, Sharebuilder does say on its site that it requires that Medallion stamp.

    Aside from the fact that it took about 3 weeks or so to complete, I had no problems with my move from Sharebuilder to Zecco.

    The only one thing that I don’t like though, is that Zecco doesn’t show your P/L ratio properly for shares brought in. They’ll be shown as bought @ $0, so your P/L ratio is sky high for those shares.

  2. Brip Blap |  Jul 12, 2007 at 12:02 pm

    Don’t you find a little scary how haphazard this process is? I have had mixed dealings with Sharebuilder, but after my last experience moving stocks around (you haven’t had fun until you’ve tried to send actual certificates into Sharebuilder) I think I will leave them alone. It seems like a real headache dealing with all of these super-low/no cost brokerages. Since I don’t trade frequently I’m OK with my $7.99 trades at Ameritrade and probably will keep most of my activity there in the future.

    Btw, I got charged by a bank for the medallion guarantee since I wasn’t a customer of theirs (a branch of my bank wasn’t near my client workplace and I had to get there in business hours). So be glad you tiptoed around that requirement!

  3. Drew |  Jul 12, 2007 at 2:41 pm

    Congrats Sun! Good to see that you have made it out without having to pay for the partial share liquidations.

    So basically, to transfer from ShareBuilder to Zecco, one needs around $50 dollars, tolerate a mountain of paperwork, and have a great deal of patience?

    I’m still unsure if transfering a small account would be worth while, but then again, to sell on ShareBuilder is $15.95. If I sold 8 of my stocks, I lose over $120. If I transferred my entire account to Zecco, I only lose $50. I think I may be better off making the switch…

  4. aschmuck |  Jul 13, 2007 at 2:14 am

    Thanks for the update. I may have to take another look at transferring over to zecco.

  5. Artie |  Jul 13, 2007 at 1:04 pm

    Sun-
    Good posting. I bet Sharebuilder is pretty sad to see you go and lose your $11 worth of PFM. I talked with them and it turns out they never charge for partial share sales, so not sure it was anything outside the ordinary. Anyway congrats- Zecco ought to be very happy to pick up an astute investor!
    cheers,
    Artie

  6. drew |  Jul 14, 2007 at 6:42 pm

    Artie,

    ShareBuilder never charges for the sale of partial shares?!

    So I could sell a few of my partial shares (In order to make a little money and round my holdings to whole numbers) and not get charged for the transaction?

    That would be awesome. I’m curious how this would prevent someone from SLOWLY liquidating their assests by selling only partial shares…

    Regards,
    Drew

  7. Sun |  Jul 14, 2007 at 7:40 pm

    Brip Blap: Yes, if you don’t trade very often, or invest in a large lump sum instead of building the portfolio with a small amount at a time, then paying $6 or $7 commission per trade isn’t really a big deal. For that reason, I also keep my Scottrade account where I pay $7 to buy/sell a stock.

    Artie, Drew: I don’t think that’s the case!

    Since the $50 account transfer fee covers the cost of liquidating partial shares, you don’t need to pay extra (such as the $15.95 regular commission) for letting ShareBuilder sell your partial shares if you want to transfer your account out. I believe this only applies to account transfer. If you just want to sell some shares, whether they are partial shares or whole shares, I think you do have to pay commissions.

    However, I never talked with ShareBuilder regarding selling partial shares, I could be wrong. If that’s the case, then it’s really out of ordinary.

  8. MoneyNing |  Jul 17, 2007 at 12:04 am

    You probably need to ask whether they will report this as a real SELL meaning you have to pay capital gains on it as transfers should not be a “sell” followed by a “buy”. If it was, you could’ve done that yourself saving so much more hassle.