PERTH broker State One’s online trading service, Amscot Discount Stockbroking, has taken out the top ranking for services aimed at high volume share traders in an annual review of the online share trading sector.
PERTH broker State One’s online trading service, Amscot Discount Stockbroking, has taken out the top ranking for services aimed at high volume share traders in an annual review of the online share trading sector.
In its second annual review of the sector, financial services research group Canstar Cannex compared the performance and value offered by 37 online trading platforms and 17 online trading service providers across Australia.
It ranked each service according to the needs of three types of investors: casual, active and traders.
In the traders category, for investors averaging 40 trades worth $15,000 each a month, Amscot was one of only two service providers to win five stars from Canstar, coming in ahead of First Prudential Market’s WebIRESS service.
In the active category, for investors averaging 8 trades worth $35,000 each a month, three providers earned five stars: Commonwealth Bank’s CommSecIRESS platform, Morrison Securities htmlIRESS platform and CommSec’s Share Trades Internet Preferred platform.
CommSec also fared well in the casual investor category for investors trading as infrequently as 10 times a year, coming second of three providers to win five stars.
The winner in the category was Bell Direct’s Silver platform, designed by Stephen Goh, the founder of former Perth online trading pioneer Sanford Securities. First Prudential Markets FP Online service ranked third.
CommSec’s strong performance in two out of the three categories saw it take out the best performance overall for the second year running.
“What sets CommSec apart is that it has really honed in on providing a true value proposition to customers,” Canstar analyst Mitchell Watson said.
Mr Watson said the review showed that getting value for money hinged on investors understanding their individual needs and not paying for trading tools they were unlikely to need or use.
“How often you trade, the average dollar amount of each trade and the level of risk you are prepared to carry makes a huge difference to the value you get from certain features offered by online trading platforms,” he said.
As an example, Mr Watson said a dynamic trading platform and charting software could prove extremely valuable for an active regular trader, but might just be waste of money for occasional investors.
Investors also needed to be aware of how brokerage fees changed according to the value and frequency of their trading, he said.
Low value trades under $500 could cost up to 5 per cent of the trade value, while the fee fell to just 0.11 per cent for trades worth $30,000 or more. Conversely, some fees reduced as the frequency of trades increased.
