Bell Direct has come out on top in the latest Investment Trends survey of investor satisfaction with online brokers. It was rated number one for value for money, research, tax reporting, trading ideas and the functionality of its website.
While Bell Direct was the overall winner, CMC Markets was rated top for charting and website navigation, and CommSec was rated top for its mobile platform.
Investment Trends research director Irene Guiamatsia says overall satisfaction levels are high, at 85 per cent – up from 83 per cent six months ago.
Only 4 per cent of investors reported that they had switched online brokers in the past 12 months (up from 3 per cent in the previous survey).
“Among eight markets studied by Investment Trends, Australia ranks among the lowest for switching activity,” Guiamatsia says.
Switching activity was more common amongst frequent traders, at 6 per cent. “Brokers can’t afford to rest on their laurels and must deliver a proposition that not only meets the needs of mum and dad investors but also more sophisticated frequent traders,” she says.
Investment Trends data shows that 635,000 unique individuals placed at least one share trade in the 12 months to May, up from 605,000 in its previous survey six months ago.
In June, Canstar reported that CMC Markets had won its online share trading broker of the year award for the seventh year running. Canstar awarded CMC five stars in all investor categories – casual investor, active investor and trader.
Canstar says CMC’s high ratings were based on its low brokerage rates and availability of different platforms to suit different investor groups.
Casual Investor. A casual investor buys and sells shares occasionally (up to eight times a year) and uses a long-term strategy to review their investment portfolio. Education tools, ease of use and cost are important requirements.
The top platforms for casual investors are CMC Markets Classic Account, CommSec Share Trades Internet Preferred, nabtrade silver and Westpac Integrated Account.
Active investor. Active investors trade around 40 times a year. They look for comprehensive research tools and low cost.
The top platforms for active investors are CMC Markets Classic Account, nabtrade platinum, nabtrade silver and Westpac Integrated Account.
Trader. A trader may buy and sell shares on a daily basis and wants access to the latest market information. Cost, availability of derivatives and a dynamic trading platform are important.
The top platforms for traders are Amscot valueRate webIRESS, Bell Direct Platinum, CMC Markets Active Investor Account, CMC Markets Classic Account and CMC Markets Premium Trader Account.
Canstar says there is also competition to improve mobile trading apps. With 50 per cent of Gen Y investors using their smartphone in preference to a PC or laptop to trade, brokers are adding mobile features such as price alerts, live prices, SMS alerts and market depth.
Investments Trends also highlighted this trend: “Mobile platform functionality is one of the fastest growing drivers of switching intentions at the moment, with the proportion of switchers who cite this increasing three-fold over the past 12 months.”