Capital One Investing

Author: Kaitlyn Short

Capital One Investing, formerly known as Capital One ShareBuilder, is an online trading platform and brokerage firm. Founded in 1996, it's headquartered in Seattle, Washington. The online platform aims to instill confidence in its traders by offering a flexible and straightforward investing experience. It further accomplishes this goal by providing online research tools, educational materials, and an easy-to-use website.

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The Good

• Variety of investment opportunities
• Straightforward services
• Features and tools
• Client support

Capital One Investing targets beginner investors. The company is geared toward rookie investors who want an easy way to dip their toes in the market and create long-term financial gains. Day traders and technical traders should look elsewhere since the platform doesn't accommodate investments based on short-term signals in the market. Other benefits include:

Variety of Investment Opportunities

With Capital One Investing, traders can expect to invest in stocks, options, mutual funds, bonds, and ETFs. The company doesn't require a minimum account balance to start a new online account neither does it charge a commission for day-to-day online trading. For real-time trading of stocks and ETFs, the cost is $6.95, while automatic investing is $3.95 per investment, and option prices come out to be $6.95 plus $0.75 per contract. These costs are competitively priced when compared to big-name brokerage firms like ETRADE, Fidelity Investments, and TD Ameritrade.

Straightforward Services

Capital One Investing is relatively easy to use. In fact, its website was voted #1 by Corporate Insight-from 2012 to 2014-for the site's design and usability. After further investigating, we found its online platform to be clutter-free and its investment explanations to be clear enough for the average layman to understand. The company's online research is also easy to understand and very thorough. It comprises third-party research reports. These documents extensively cover news, ratings, and other key pieces of information that affect the market. The reports also highlight data on equities, mutual funds, and ETFs.

Features and Tools

To further elucidate the investing process, the company combines research for its traders, sometimes consolidating data from up to 13 research providers to create 1, in-depth research package. These research providers include the likes of Morningstar, a revered investment research, and management firm. Many customers hail the company's PortfolioBuilder and we have to agree with their positive remarks. The tool allows company clients to create a diversified portfolio based on their investment style and long-term goals. The portfolio can then be purchased for a flat rate of $18.95. This tool makes Capital One Investing one of the few brokerage firms in the industry to provide such an asset for long-term investors.

Client Support

Besides these positive points, the company offers a highly rated customer service. We were very impressed by how professional, friendly, and helpful their representatives were. Whether contacting them by phone or through their live chat support, it was clear that the representatives were well-trained, enthusiastic individuals. So, we were not surprised to learn that Capital One Investing has won American Business Awards-from 2013 to 2015-for its friendly customer service representatives.

Mobile App

In addition to the distinguishing customer service, the company provides a highly rated mobile app to accommodate investors on the go. By simply signing in from their favorite devices, investors can place trades and get quotes at the push of a button.

Financial Advisors

For an additional fee, the company provides expert financial advisors who can offer personalized guidance to traders. These advisors promise transparency and clear communication when building long-term plans, tailored to individuals' personal financial needs and goals.

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The Bad

• Price
• Problems for advanced traders
• Email support

Capital One Investing offers a number of valuable trading and investment services, but there are limitations that prospective clients should be aware of prior to using the platform. These drawbacks include:

Price

While competitively priced to compete with big brokerage firms, Capital One Investing is quite expensive relative to other discount brokers, like TradeKing, OptionsHouse, and MB Trading. OptionsHouse, for instance, charges $3.95 a trade, which is more appealing in comparison to Capital One Investing's cost of $6.95 for real-time trades. So, in reality, Capital One Investing is neither expensive nor inexpensive, but rather in the middle of the brokerage spectrum. Capital One Investing doesn't charge a commission for day-to-day online trading of mutual funds, but the company's expense ratios for mutual funds are at times fairly higher than the equivalent ratios provided by other companies, such as Fidelity. One such expense ratio for a certain mutual fund was 0.51% with Capital One Investing, with no commission fees, while, at another brokerage firm, it came out to be 0.18%. The aforementioned point can be a cause for alarm for beginner investors, who may want to seek out other brokerage firms that provide the same easy-to-use website, but come out to offer lower annual fees. While automatic investments set the company apart as traders can automatically set up buying schedules for certain stocks, there is a slight problem to consider. We've found that users of this tool cannot sell their securities using automatic investments. This means the company makes it costly to exit a stock than to purchase one.

Problems For Advanced Traders

Apart from these concerns that rookies may have, advanced traders could also find reasons to be frustrated with the company. There are few advanced tools to satisfy their investing needs. Options traders, for instance, could become discouraged since the company offers few tools for their desired trade. Instead, these kinds of traders could be better off looking into other brokerage firms, like OptionsHouse.

Email Support

Capital One Investing's customer service, via phone and online chat support, comes highly recommended. However, some customers have complained about the email support. For instance, some customers say it's inconsistent, as response times tend to vary from 24 hours to no responses being received. Additionally, while the online platform is easy to use and navigate, sound customer suggestions include: providing customizable dashboards so traders can see exactly what they want to after logging into their account.

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The Bottom Line

Capital One Investing's website is easy to use and provides a no-frills interface that's easy to navigate. The company also provides expert customer service to ensure customers reach a person via phone, live customer support, or email. This is why it has garnered awards in the former two departments. Additionally, it offers extensive research to train beginner investors before they trade on the market. This makes it ideal for rookie investors trying to begin investing endeavors. Casual investors looking for automatic investments will also be satisfied with the company's online platform, and this tool remains to be a primary reason for people who choose to invest with the company. Capital One Investing's app also takes in investors looking for a quick and easy ways to invest on the go. However, when all is said and done, seasoned traders and tool-hungry investors will be frustrated with the platform and so, should look elsewhere to satisfy their investing needs. The company caters to beginners and does a good job of training and instilling confidence in these novice investors.