To help you start investing, we are taking a look at how to find the right Australian stockbroker for you.
The 8 Best Australian Stockbrokers
Now that we have covered what a stockbroker is and how to choose one, here is a review of the 8 best stockbrokers in Australia. This list provides a brief description of the different brokers to help assist you in your research. It is important to remember that this is not a definitive list and should not be considered financial advice. Before making your final decision, ensure you have conducted further and more substantial research. All prices and values are in US dollars unless specified as A$, which represents Australian Dollars. eToro is an Israeli fintech company that has been operating since 2007. It is not listed on any stock exchanges, nor does it disclose its financial information. However, it is safe to use as it is regulated by ASIC. eToro excels at social trading with over a million users, highly active social feeds and up-to-date public trading profiles. Its innovative CopyTrader feature allows users to see what other, more experienced traders are doing in real-time. It also automatically copies their trades to your portfolio. This is ideal if you are new to trading or do not have the time to manage your portfolio. The broker allows you to invest in stocks from across the world, including the New York and London Stock Exchanges. eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Not suitable for all investors. Capital at risk. See PDS and TMD. 80.2% of retail investor accounts lose money when trading CFDs with this provider. XTB is listed on the Warsaw Stock Exchange and regulated by the UK’s FCA. It is not regulated in Australia but is still considered safe to use. Forex fees are very competitive; however, stock CFD fees are higher than some competitors. It offers multiple withdrawal options and educational material; but lacks fundamental data and offers limited research tools. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. It offers a 20% welcome bonus up to $10,000, according to regulation and a free 21-day demo account with $100,000. Instruments include:
Metals Commodities Stocks FX Options Oil ETFs Options Crypto currencies CFDs Indexes Shares Spread betting Indices Forex Bonds
AVATrade EU Ltd is regulated by the Central Bank of Ireland. (No.C53877) Ava Trade Markets Ltd. is regulated by the B.V.I Financial Services Commission. It is also highly regulated in Australia, South Africa, Japan, Middle East, Cyprus and Israel You can not trade with AvaTrade in the US, North Korea, New Zealand, Iran or Belgium. Mínimum deposit of $100, no withdraw limit and no fees.
City Index is known for its use of spread betting as the money you make from your bets are tax-exempt. It is a short-term strategy rather than a long-term investment. The platform has an interactive dashboard with multiple market views, charts and technical indicators, making it more suited for experienced traders. City Index offers low and competitive fees but has limited stock options.
Although it does not offer services to traders in Hong Kong, New Zealand and a few other countries, FXCM is well regulated by FCA, ASIC, CySEC and FSCA. FXCM has a long history, founded in 1999 – and although there have been some legal problems in the past, it is considered to be a reliable broker. With FXCM you can trade the following instruments:
45 currency pairs 15 stock index CFDs 7 cryptocurrency CFDs 12 commodity CFDs 219 Stock CFDs 1 bond CFD
There are two types of account – a Standard account with a minimum deposit of $50, or an Active Trader account that must maintain at least $25,000. The only real difference between these account types is that the cost of the spread is slightly better for the trader with an Active Trader account. FXCM does not charge a commission, and the cost of trading is built into the spread. There are also no fees to open an account, deposits are free from bank accounts as well as credit and debit cards, and although there is an inactivity fee, it doesn’t kick in until the account has been untouched for more than 12 months. Withdrawals are free to a credit or debit card, but you can expect withdrawal fees if you are moving funds to your bank account. FXCM works with some of the most popular trading platforms, like MetaTrader 4, ZuluTrade and NinjaTrader, but it has a decent proprietary platform that is available as a web and desktop trader as well as a mobile app. The Trading Station web platform is simple and user-friendly, with great customisation and search facilities. You can make several different order types on this platform, including time orders. However, you cannot receive any price alerts or notifications, and the research tools are not integrated – you need to open another web page to use them. The desktop platform is just as easy to use, but there are a lot more order types available and you can set price alerts and notifications. The mobile version of Trading Station is available for both iOS and Android. It too is simple to use, but the search function is a bit clunky and doesn’t have the most intuitive interface – and surprisingly, it does not support any notifications or price alerts. One of the best parts of the FXCM platform is the wealth of educational materials. Alongside the useful demo account, there is an extensive library of video, webinar and downloadable PDF content that has all the information a beginner needs to feel confident in trading. The research provided includes charts, technical analysis and a news feed. There is also a market screener and great trading ideas. FXCM might have limited instruments, but with low fees and no commission with good education and research, it is a great broker for beginner traders.
The parent company of SwitchMarkets.com (Royal ETP) is regulated by ASIC and CySEC as well as some other lower-tier jurisdictions, while client funds are segregated in Tier 1 banks – which makes it more secure. With SwitchMarkets.com you can trade:
62 Forex pairs 8 metals 21 indices 86 share CFDs 4 cryptocurrencies
There are just two account types available, which makes getting started a breeze – you can decide to go for a Standard account that offers zero commission and spreads as low as 0.6 pips, or a Pro account which has spreads from 0.0 pips and a $7 per lot round turn commission instead. Each account has a minimum deposit of just $50. For international traders, and those that want flexibility in both deposits and withdrawals, there are multiple options – from the usual credit and debit card to PayPal and eWallets like Neteller and Skrill, for example. Deposits and withdrawals are simple, fast and free. The education available on the platform is also simple – several ‘cheat sheets’ covering all you need to know about trading, from terms to strategy, all in downloadable PDF formats and all for free. There are several tools available on the platform to improve your trading strategy, including a Market Heat Map, lot size and Forex profit calculators, and even EA tools. As a relatively new broker, traders will find many offers to entice them to sign up – from a free VPS to a credit bonus. This broker is not available in Japan but offers several options for international traders without hidden costs. Risk warning: Trading OTC derivatives is risky; please read our PDS and disclaimer before trading with us. We encourage you to seek your own independent advice and to consider your own financial situation, needs and objectives prior to making any decisions. CMC Markets won six awards in Australia in 2018, including ‘highest overall client satisfaction’, ‘platform features’ and ’educational material/program’. It is regulated by ASIC, and CMC opened its Sydney office in 2002. CMC Markets is considered one of the best trading platforms with a diverse portfolio. Its education tools include downloadable guides that detail how to trade and what strategies to use to get the most from your investments. 77% of Retail CFD or Spread Betting Accounts Lose Money. This could be on behalf of an individual or an organization such as a hedge fund. Stockbrokers work in one of three ways:
Discretionary – Whereby they take over the complete management of the portfolio and make decisions on the client’s behalf. Advisory – Here, they can offer suggestions and advise on the best course of action, but they cannot make any trades without their client’s authorization. Execution-only – The stockbroker does not offer any advice. They simply make the trades and investments they are told to.
What Are the Different Types of Stockbrokers?
As the stock markets can be complex and difficult to understand, you must first learn the different types of stockbrokers operating in Australia:
Full-Service Brokers
As the name suggests, full-service brokers do everything to make your investing experience as easy as possible. They will make suggestions, offer advice, and action trades and investments on your behalf. Full-service brokers also provide detailed financial reports detailing your portfolio’s performance.
Discount Brokers
Discount brokers are more affordable than full-service brokers and only make trades when their clients want them to. They often do not offer any advice, so you still need to manage your finances and do your research.
Online Stockbrokers
Online stockbrokers are increasing in popularity as you can make investments and manage your portfolio anywhere and at any time from your mobile phone. They sometimes offer educational material and data analysis tools. These types of brokers are for beginners and experienced traders.
How Do Stockbrokers Make Money?
Stockbrokers make money by charging a commission, subscription fees, or additional fees for different investments, trades and management levels.
Are Australian Stockbrokers Regulated?
Australian stockbrokers are regulated under the Australian Securities and Investments Commission (ASIC). It acts under the Parliamentary Secretary to the Treasurer and regulates all Australian companies, financial markets, and financial services organizations and professionals who advise on:
Insurance Superannuation Investments Credit Deposit-taking
Its role is to:
How to Choose an Australian Stockbroker
If you are a beginner, you might want educational material and easy-to-use software and analytical tools. More experienced traders may want the best data and research tools. Establish where you are in your trading journey and decide what features will benefit you now. You should also consider if you want a platform with social copy trading. Consider that what is difficult for them to use could be easy for you; therefore, find as many opinions as you can to further your understanding. If your stockbroker is regulated, it will share those details on its website. Alternatively, you can search the ASIC database. When looking at the safety of a broker, the most reliable have been trading for at least two years or have survived a recession. If the broker is outside Australia, check if it is regulated by a Tier one reputable country such as the UK. Using a stockbroker with multiple tradable assets allows you to diversify your portfolio and maximize your investments. Some platforms are very easy to use with modern interfaces. Others are more dated and simpler. There may also be different charges or subscription options for the different platforms available. The average transfer time should be two or three days. Stockbrokers that make withdrawals difficult may not be trustworthy. If you need tech support, find a broker with 24/7 help via telephone or live chat. Regardless of how much support you need, the broker should have at least two ways you can communicate with it, and it should respond within two working days. Find what educational materials it has. Some brokers have limited materials, while others have webinars, podcasts and demo accounts. You should also assess its research and data tools. Not every broker offers fundamental data, yet it is a valuable tool for analysis. Deciding what educational and research tools you have to have will help you narrow your choices. On Superhero, you can trade with a little as $5 brokerage and you do not have to pay anything extra on US trades. CommSec is also a great shared trading platform that allows users to trade with ETF, forex, direct debit and CFD. It has great educational tools and is user-friendly for traders of all levels. FP markets is a well-established finance broker based in Sydney. It has fantastic service reviews and has developed a strong reputation in the forex trading market. Traders have access to more than 10,000 stocks across the global exchange market and they can trade in a range of commodities including minerals and oil. An execution trader is someone who places trades at the discretion of others. They must carry out the trade that is directed either by an advisor or a computerized mechanism. Execution traders are often found in hedge fund trading positions. 80.2% of retail investor accounts lose money when trading CFDs with this provider. You will also need first-hand vocational experience and a training qualification known as a VET. Depending on the types of stocks you want to broker with, you may need a license as well. A good trading portfolio will also help you become a successful stock broker. If you are looking to broker primarily with international and US markets then eToro is the best trading broker for this type of trading. If you are looking to exclusively trade with Australian shares then Superhero has the lowest brokerage fees. 80.2% of retail investor accounts lose money when trading CFDs with this provider. 80.2% of retail investor accounts lose money when trading CFDs with this provider. If you do not want the personal interaction that you would have with a broker, there are a few ways you can still invest. You can still invest in initial public offerings (IPOs). Another way to trade without a broker is to invest in a managed fund. Managed funds are a list of multiple company stocks that you can monitor by yourself. If you work for a company or corporation, you may also be able to invest in company shares as part of your contract. At this moment in time, Robinhood has not launched an app for use in Australia. 80.2% of retail investor accounts lose money when trading CFDs with this provider. The trading platform Sharesies is great for beginners because it has no minimum investment, meaning you can invest a few dollars each time. There is little financial risk to using Sharesies. It also has very low brokerage fees and users get access to international stock trading. This means that users can use Sharesies to get comfortable with trading before entertaining other trading platforms. eToro, IG, CMC Markets and Superhero all have no brokerage fees. These trading platforms are some of the most cost-effective ways in which you can begin investing. 80.2% of retail investor accounts lose money when trading CFDs with this provider. Each online broker has its pros and cons, and what appeals to one person may not appeal to another. The eToro platform always features related articles across the web. It has an attractive interface and enough features to suit all trading levels. 80.2% of retail investor accounts lose money when trading CFDs with this provider. The CopyTrader feature is particularly popular as it allows traders from all over the world to connect and learn from each other. Before making your final decision, we recommend that you spend time working through this list, comparing it with others and taking advantage of the free demos. Reputable stockbrokers will allow you to set up a virtual account with fake money. Use these accounts to test your trading strategy and all the platform features, including customer care and trading/non-trading fees. There is no limit to the number of brokers you can open accounts with; therefore, try as many as you like and until you find a platform that works for you. You should continue using a demo account until you are confident you are ready to invest your own money. These signs will indicate if you are ready to live trade. WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.
