To an almost comic degree, Wal-Mart has an insatiable appetite for expanding the reach of the products and services it offers, and now, behold, the behemoth has ventured on to your turf: financial advice. Meet Wal-Mart Easy Investing by Sharebuilder.
Wal-Mart teamed up with the discount-brokerage platform, ShareBuilder Corp. of Bellevue, Wash., and launched the online brokerage service (click here to visit site) at the end of April. Wal-Mart already offers financial services such as credit cards, check printing, and credit reports.
Wal-Mart’s marketing of the service boasts that it’s designed to make investing easy, and with 127 million shoppers visiting Wal-Mart stores weekly, the Bentonville Ark.-based, who knows, the retail magnate might uncover some unsophisticated investors with thousands, maybe millions, buried underneath their chicken coop. Is Wal-Mart’s financial services growth a threat to the average wirehouse, b/d or RIA financial advisor? Probably not.
Anne Marie Ricard, a spokeswoman for ShareBuilder Corp. says the service is geared towards helping novice investors get started. Wal-Mart Easy Investing is a self-directed online investing service, offering a full range of account types (individual, joint, ESA, IRA, Roth, etc.) and features what is called an Automatic Investment Plan that allows investors to purchase partial shares of stocks with the intent of accumulating investments over time (with a $4 transaction fee for recurring automatic single investments). Subscribers can also buy and sell stocks during market hours in real time. Market orders cost between $11.95 and $15.95, depending on the individual’s subscription level, and the subscription fee ranges from zero to $16 per month.
There are no minimums to open an account, there is no dollar minimum to access a money market fund, and there are three options for recurring investment plans: basic; standard and advantage.
Although there aren’t any financial advisors offering advice in the traditional sense, Ricard says Easy Investing customers do have access to a free advice tool called the PortfolioBuilder tool, an online tool that helps them create a diversified portfolio based on their goals and investing style, in addition to access to investor education material. Specifically, the PortfolioBuilder tool includes a personalized portfolio of exchanged traded funds (ETFs), a profile analysis to help the investor understand his or her investing profile and risk analysis, and an automatic investment plan which integrates the suggested portfolio.
The PortfolioBuilder tool doesn’t offer fiduciary protection to investors, and although it is “designed to provide helpful investing guidance,” to self-directed investors, the Website warns that investors “must carefully consider the appropriateness of the proposed investment in light of your own personal financial circumstances.” In addition the PortfolioBuilder tool does not update the investing plan, and the responsibility of monitoring and adjusting the plan falls to the individual investor.
