Financial services research company CANSTAR CANNEX has awarded its inaugural best value for online share trading to CommSec.
Financial services research company CANSTAR CANNEX has awarded its inaugural best value for online share trading to CommSec.
The share trading division of Commonwealth Bank was awarded five stars after CANSTAR canvassed 17 institutions that marketed a total of 36 flexible broking accounts.
CANSTAR said it was prompted to rate online share trading after finding that accounts were increasingly targeting specialised investor markets.
"We cut through the confusion to find out what really matters to traders and we found that different trading types value different features," CANSTAR head of research Steve Mickenbecker said.
"For instance, an investor who does less than a dozen share trades a year at a value of $5,000 a time is likely to value a great educational service provided with the share broking account."
"On the other hand, a dynamic trading platform and charting software are must-haves for the active trader."
CANSTAR rated the online trading accounts according to three profiles; investor, sophisticated investor and active trader.
CommSec performed strongly in all three profiles.
Other institutions recognised were Bell Direct and First Prudential Markets for both the investor and active trader profiles while Morrison Securities performed well in the sophisticated investor and active trader categories.
NAB Online Trading was also recognised in the sophisticated investor profile.
The CANSTAR announcement is below:
Belief in the long-term viability of of investments continues to shore up the popularity of online share trading in spite of bear market hibernation.
This is not surprising, as Australlians have the highest percentage of share ownership in the world - 37% direct share ownership and 67% indirect share ownership mainly through superannuation funds.
Apart from the obvious losses, what the downturn has highlighted is the importance of matching trading methods with trading behaviour to minimise risk and costs.
Investors now have a choice of 36 onling broking accounts offered by 17 financial institutions. Accounts are increasingly targetting specialised investor markets, prompting financial services research company CANSTAR CANNEX to research and rate onling share trading to determine the value they offer.
"We cut through the confusion to find out what really matters to traders and we found that different trading types value different features," CANSTAR CANNEX Head of Research Steve Mickenbecker said.
"For instance, an investor who does less than a dozen share trades a year at a value of $5,000 a time is likely to value a great educational service provided with the share broking account."
"On the other hand, a dynamic trading platform and charting software are must-haves for the active trader."
Paying brokerage and on-going fees on the wrong account can cruel an investor's portfolio so it pays to scrutinise costs.
In order to compare online trading accounts, CANSTAR CANNEX rated them according to three profiles, Investor, Sophisticated Investor and Active Trader.
"We classed Investors as those who buy and sell shares occasionally, perhaps 10 times a year and use a long term strategy to review their investment portfolio," Mr Mickenbecker said.
"The Sophisticated Investor buys and sells share and derivatives more frequently, say, 4 per month averaging $35,000 in value."
"At the top end of the market, we consider an Active Trader to buy and sell shares and derivatives at the rate of 40 a month, valued at around $15,000 per trade."
CANSTAR CANNEX found different brokers and platforms targetted different investor groups. Thus brokerage fees varied greatly by the number of trades made.
Investors are warned that using the wrong trading platform will cost uneccessarily, said CANSTAR CANNEX
Looking at online trading accounts that suit the three defined invesor profiles, CANSTAR CANNEX awarded its inaugural Best Value accolades to CommSec which performed strongly across all three categories nationwide.
