Does anyone else invest through Loyal3? I like the site because you only have to invest $10 at a time, so you can buy partial shares. Plus, no fees. I bought my Kraft shares through Loyal3, and so far, I am pretty happy. I'm thinking about buying other shares through them, but I haven't yet. To me, it's a great site for beginning investors.
To be honest I'm not aware of the site but you've got me looking into it. I usually stick to sites that I'm familiar with, that's worked for me and I know that I can invest with confidently, but I'm always open to looking round and seeing I'd there are better options around.
I just checked out their website and it is fascinating what they are trying to do. For those that don´t want to bother to read. What they do is allow you to invest any amount down to $10 into a hundred or so different companies ( mainly common companies that average people know the name of). They then pool all the money and buy shares once per day in those companies and so you can ówn´ a fraction of a share. For ´real´investors there would be a few issues. First is that you don´t get the share price when you order the buy/sell, instead you get it when they execute their order once per day. Obviously not a good thing for people who like to time their orders during the day. The second issue is the limited number of companies you can buy through them. They are obviously targeting non-investors with their service because basically any company you would see while shopping at a mall is one that they use.. which makes their offerings very consumer oriented. The term they used on their website is ´social prominence´.. Third issue - They are not governed by the SEC and your accounts are not FDIC insured, and instead use two regulating services that I never heard of. This seems a bit fishy to me. I am not even sure their business model is legal in the USA. There are no fees to buy or sell, which begs the question of how they are making a profit. Are they leveraging your holdings?
Always seems fishy when you can't figure out exactly HOW the company is profiting from you. Because that is what companies aim to do, they need to make a profit from providing a service. So if there are no monthly fees and no commissions... well there must be another way they are grabbing their slice of the pie. Looks like a nice alternative to people who don't have the cash to 'invest properly'... as long as this is a reputable and safe company.
Thank you for the review, petesede. I work for LOYAL3 and would like to provide some clarity to the third issue you describe. We are registered as a broker-dealer under the Securities Exchange Act and are regulated by both the SEC and FINRA. You can check our status using FINRA’s online ‘Broker Check’ service. As is true with all broker-dealers, the securities on our platform are not FDIC insured (this is specific to bank deposits), but your assets are protected by SIPC.
Thank you for the comment, crimsonhost747. I work for LOYAL3 and would like to provide some additional information related to your comment. We earn revenue from the companies going public and from certain companies with public stocks available on our site, rather than commissions by investors. You can learn more about our business model on our "LOYAL3 Overview" page and in our FAQs.
