Kiwi and Australian brokers' online offerings

Friday 20th April 2001

By Francis Till

E*Trade Australia's website has a phone number for Kiwi investors to call if they're interested in investing and the company considers that enough of a New Zealand presence to list New Zealand as one of the growing numbers of countries in which it operates.

That might seem like the sheerest arrogance but the Australasian online trading community has not made much on an impression on the outside world - and perhaps not even on our own investors.

Simply put, most regional online brokerages do little to promote themselves to general online audiences, opting instead to promote themselves only within pre-existing financial community channels.

The Yahoo! portal for Australia/New Zealand, for example, lists all the online brokers it has in its normally comprehensive, user driven database for the two countries.

There are four on Australia's list (including E*Trade Australia) and one on New Zealand's: DFMainland.

Yahoo!'s open source step-sibling, DMOZ.com, lists 13 New Zealand brokers, of which only three indicate they offer online trading.

YourBrokerOnline.com.au offers a slightly bigger view of the Australian online broker world through a tool that allows users to compare broker fees with a single click.

Five of the 24 firms listed there will make a $1 trade and none of those five will charge a subscription fee to do it - but the commissions range from a low of $A15 at Merrill Lynch HSBC to a high of $A33 at eStar Online Trading.

To be fair, fees are almost always tied to the particulars of a trade, and using an $A5000 benchmark all 24 companies will take your business.

The most expensive ordinary trader is Credit Suisse First Boston Australia Equities, which will harvest $A66 in fees after it collects an $A100 monthly subscription fee.

The least expensive is AMP Broking, which charges no subscription fees and only $A15.95 for the trade itself (provided you do, indeed, execute it over the internet).

At home, DFMainland was the first broker to offer an online, real-time share trading service, in 1996, but it did not fare well in Sharechat's Best (Online) Broker Awards 2000, even though the comparison pool is still small and the ranking was based on user votes.

That award ranked Access Brokerage first, with 33% of the votes - and the largest user base.

The results in the voting reflect almost precisely the size of the client pool, according to Sharechat, which gave the second spot to Direct Broking, third to ASB Securities, fourth to DFM, fifth to Sharechat's own, new, NetBroker service, and sixth, last, to Quicken - which shut down in December, two months after the awards.

Most online share broking services in New Zealand are price competitive on trade and subscription costs with their counterparts in Australia.

Some offer flat fees and/or zero subscription costs, and several provide strong investor information support.

Access Brokerage's online service, Web Broker, for example, charges a flat $29.50 fee for transactions of any size through the NZSE, and no client membership fees.

Transactions still require more effort than in some countries, if you can find the brokerages at all, but the majority of brokers use BNZ Call Accounts for funds transfers - getting around, at last, the need for hand-signed transaction slips.

URLs

http://www.access-brokerage.co.nz/

http://www.dfmtrade.co.nz/

http://netbroker.sharechat.co.nz/

http://www.directbroking.co.nz/

http://www.asbsecurities.co.nz/

http://netbroker.sharechat.co.nz/

ASX online broker fee charting (and other information): http://www.yourbroker.com.au

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