The Dividend Investing Blog

I spent a number of years using dividend reinvestment programs (DRIPs).  These plans allow you to buy shares of a company directly without using a brokerage.  However, as the years wore on more and more plans started charging fees and it became more and more of a hassle to enter all the data into Quicken.

So one fine day I decided to open an account with an online brokerage to consolidate all my DRIPs.  I have had online brokerage accounts previously so this was nothing new for me.  I was looking for a brokerage that would give me the lowest cost for my investing style.  The key here is my style.

I stumbled upon FOLIOfn.  I had heard of them before but never really understood their strategy.  This company charges a flat fee for trades.  Currently, you may pay $290 for the year or pay $29 per month.  At first glance you may get sticker shock, but let’s see what that flat fee gets us.

• Unlimited Folios.  A Folio is basically like a folder you create to hold stocks.  For instance, I have a Dividend Growth Strategy Folio that contains all my dividend stocks.  This is nice because I can see the weight of these stocks and I can buy all stocks in the Folio with a single buy order.  It’s like creating your own mini-mutual fund.
• Commission-Free Trading Window.  If you submit a window buy order, then it will be executed at either the 11:00AM or the 2:00PM trading window.  They also offer $3 market, limit, stop, and stop limit orders if you need real-time execution.
• Unlimited Accounts.  This means you can have your IRA, personal account, etc. at FOLIOfn and you only pay the one flat fee for all the accounts.
• Fractional Shares.  Nice feature that I really love.  I can just enter a dollar amount and they buy fractional shares up to that dollar amount.  This is also nice for trading entire Folios.

What are the downsides of FOLIOfn?

• Not all stocks are free.  FOLIOfn has a list of the stocks, ETFs, and mutual funds available.  They are always adding new ones but please take a look at this list before you even consider this brokerage.
• Limited research materials compared to other online brokerages.
• No direct Quicken link.  They just recently updated the Quicken downloads to support the newer versions of Quicken.  So you can download and import your account transactions, but there is no way to just one click download from Quicken.
• EFT takes too long.  It usually takes about five days for them to transfer money to my bank account.  This is a big downer for me.  I don’t expect it the next day, but they should be able to do it in three days maximum.

I like FOLIOfn because I usually trade enough during the year to justify the cost.  It allows me to try new strategies and track my progress within a Folio.  Overall it fits me fine, except for the downsides I mention.  But hey, no brokerage is perfect.