Finding the right stock broker for you


One of the most common questions asked of people starting out is what broker do I use?
For most people starting there is a few options but you will more that likely be looking for an online broker where you can execute trades by the click of a mouse. There are options available to use full service brokers who can offer you a full service of recommendations, opinions and advice that you can follow. These brokers typically have a minimum investment amount and charge for their services. Think people like financial advisors or wealth managers.
So let’s say that you decide you’re happy to go it alone and want an online broker what are some of the considerations you need to think about when deciding who to go with.

Fees

Often the case with most brokers, they are free to sign up for but what they charge for each trades and the information the provide can vary widely. When choosing a broker you are not locked in to stay with them and can switch at any time so you may have more than one account

CHESS vs Custodian

CHESS stands for Clearing House Electronic Subregister System and is the computer system used by the ASX to manage the settlement of share transactions and to record shareholdings. Put simply, CHESS Sponsored means the ASX is keeping a list of who owns what shares. If your shares are ‘CHESS Sponsored’ it means when you buy or sell shares ASX has a record of you owning those shares directly

Some brokers operate under a custodian model, meaning they hold the shares on your behalf, if the broker was to go out of business your ownership of the shares is as clear as if the were Chess sponsored. Most brokers within Australia operate under the CHESS model however there are a couple that don’t. 

Finding the right Broker for you

The below list isn’t a complete list but will give you an idea on some starting price points and markets that each broker gives you access to. This doesn’t take into account trading experience, service levels or access to reporting
I personally use Commsec as I think I have just gotten used to their platform but like the level of research and information the platform gives me access to.

Its hard to go past Superhero’s offer of $5 flat fee trades and zero brokerage on ETF’s which is a great way to dollar cost average into the market, of course before making any broker decisions its importatnt to do your own research and work out which platform works best for you
BrokerAustralian Brokerage FeesUSA TradingInternational Trading
Commsec$9.95 under $1000
$19.95 over $1000
Yes Yes
Nab Trade$14.95 under $5000
$19.95 over $5000
YesYes
Westpac$19.95 or .11%YesYes
ANZ$19.95 under $5000
$24.95 over $5000
YesYes
CMC Markets$11.00YesYes
Superhero$5 per trade
$0 brokerage on ETF’s
Qantas points on trade
YesNo
StakeBeta version $0 BrokerageYesNo
IG$8.00YesYes
Interactive Brokers$12.50YesYes
Self Wealth$9.50 YesNo
eTorroNot AvailableYesYes

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