ING’s Sharebuilder business awaits word of its fate

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ING’s Sharebuilder business awaits word of its fate

By Dan Jamieson

October 28, 2009 4:09 pm ET

The fate of another ING-owned brokerage business is now up in the air.

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As part of a strategy announced Monday to begin paying back Dutch government bailout money, Amsterdam-based ING Groep NV has agreed to divest its U.S.-based ING Direct unit by the end of 2013.

That unit, best known for its $91 billion in assets online banking operation, also owns Sharebuilder Securities Corp., which provides online discount brokerage as well as a service that allows investors to buy fractional shares of stocks and ETFs on a weekly, bi-weekly or monthly basis for as little as $1 per transaction.

Sharebuilder, which has no branch offices, also offers an ETF-only 401k plan and home mortgages.

Sharebulder’s assets total about $3 billion and have an average account size of roughly $15,000 per client.

ING Groep also will be selling its U.S.-based insurance unit, which operates several independent broker-dealers.

Three of those BDs are independent firms, which are being pursued by Lightyear Capital LLC. (See related story.)

Victorina De Boer, spokeswoman for ING Groep, said the company is still evaluating how to handle the broad range of divestitures announced Monday.

“We have very strong, great brands [in the U.S.] and we have to manage that separation very carefully,” she said.

In a statement, ING Groep said ING Direct was a “very strong franchise” that will require several years to sell.

“ING remains committed to the ING Direct franchise [with its] simple transparent products and market-leading efficiency,” the company said.

For now, it’s still “business as usual,” said Dan Greenshields, president of Sharebuilder.

“We’ve been ordered not to change anything,” Mr. Greenshields said in an interview.

The financial crisis has actually helped Sharebuilder, he said, by driving customers to his company who have been “ignored and unloved” by competitors.

As of September, year-over-year revenues at Sharebuilder are up 50%, Mr. Greenshields said, and the number of account transfers has doubled.

Most new accounts come from other online firms, but Shareholder also gets clients from the wirehouses.

Two-thirds of its customers are under age 39, Mr. Greenshields said, a unique client demographic that has increased its ratio of buy orders during the market sell-off.

Last January, the Dutch government bailed out ING Groep by agreeing to take on the firm’s portfolio of toxic assets. The rescue package was reportedly worth $15 billion.