Author Topic: Stock Broker Australia - which one?!  (Read 11913 times)

EliseHearts

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Stock Broker Australia - which one?!
« on: February 24, 2015, 07:37:43 PM »
I think I've driven myself mad trying to decide on a broker so I can start investing.
How hard can it be?!

I want to have access to international and Australian stocks, and maybe ETFs at a later date.
I do NOT want any 'monthly account keeping fees', nor charges incurred for not trading.
Ideally cheap brokerage fees, but since trades will be infrequent, bulk investments, this is less important.

I thought CommsSec was good - but if you don't open with their account they charge you more, otherwise the charge you for keeping the account anyway!!

Then I thought maybe CMC markets stockbroking - famous for cheap rates and fees.
But as far as I can tell they don't have access to international shares.

So now I'm thinking maybe I should have two brokers - one for Australia and one for international.

Is this what others do or have I missed something?
Is there an easier way?

I'd appreciate some feedback and any experiences you can share!

Cheers,
Elise

Scott

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Re: Stock Broker Australia - which one?!
« Reply #1 on: February 24, 2015, 11:11:30 PM »
Interactive brokers is pretty good on local and offshore shares. Has a small monthly fee but can be offset against brokerage.

marty998

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Re: Stock Broker Australia - which one?!
« Reply #2 on: February 25, 2015, 01:56:18 AM »
Commsec - so easy to use. Brokerage is neither here nor there in the grand scheme of things. Especially if you are going to be investing and not trading.

Yes you will need to open a Commonwealth Direct Investment Account to get the internet preferred brokerage rates ($19.95 up to $10,000), but you don't exactly have to keep any cash in there until you need to move funds to make the trade.

You shouldn't be getting charged a monthly fee with Commsec - where did you read that?

Primm

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Re: Stock Broker Australia - which one?!
« Reply #3 on: February 25, 2015, 01:59:29 AM »
I'm with CommSec and have never paid a fee. Right now there's $2.81 in my CDIA account, but more often than not it's $0. Not sure where you got the idea that there were fees or that you have to bank with them. I certainly don't.

dungoofed

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Re: Stock Broker Australia - which one?!
« Reply #4 on: February 25, 2015, 03:11:31 AM »
I use HSBC's overpriced $15.95 trades. I went with them because I knew the majority of my trades for a while would be during the first three months (they have a promotion where you get up to $600 back in brokerage), and also because it links directly to my saving account. But it's pretty basic functionality, no access to international markets.

At the risk of derailing, I'm interested in what you'd be looking to invest in on international markets that wouldn't be better done via an ETF on the ASX.

EliseHearts

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Re: Stock Broker Australia - which one?!
« Reply #5 on: February 25, 2015, 07:19:47 PM »
Perhaps I misread the terms and conditions for their investment accounts, but the following pdf suggests they charge a $5 monthly fee.
https://www.commbank.com.au/personal/apply-online/download-printed-forms/SavingsInvestment_ADB2852.pdf
It also says so more explicitly here:
https://www.commbank.com.au/personal/accounts/savings-accounts/commonwealth-direct-investment.html

Concerning international markets I'd appreciate some feedback, since I might be approaching it incorrectly.
My understanding, was that it was important to have diversification in both industry and geography, and so figured it would be valuable to have some international shares for that diversity.

potm

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Re: Stock Broker Australia - which one?!
« Reply #6 on: February 25, 2015, 07:43:41 PM »
Most people here would get international exposure through ETFs which are traded on the ASX.
International share brokerage is very expensive unless you go with an overseas broker like interactive brokers or option express.

If you are just buying ETFs then CMC markets would be the cheapest Australian broker. I think interactive brokers is the cheapest overall but they don't offer CHESS holdings like the Australian ones do. Commsec is the most expensive. They have nice systems and app though.

Primm

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Re: Stock Broker Australia - which one?!
« Reply #7 on: February 25, 2015, 08:08:00 PM »
Hmm. Quite clearly the T&C you linked to mentioned a $5 a month fee, and a $10k minimum. Maybe the CDIA they open for you when you open a trading account is different from that one? Mine has been open since July 2014 and I haven't paid a cent in fees, and my actual balance has never been more than $2k and that's briefly when I'm deciding which ETF to buy next.

EliseHearts

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Re: Stock Broker Australia - which one?!
« Reply #8 on: February 25, 2015, 08:59:50 PM »
Okay, so I just need access to the ASX including ETFs - Much simpler!
I'm going to send out an email to CommSec support and try to make sense of this CDIA thingo.
Maybe they've change the T&Cs for new customers...
Otherwise, I guess CMC is the better option.

EliseHearts

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Re: Stock Broker Australia - which one?!
« Reply #9 on: February 26, 2015, 08:16:17 PM »
I got a reply from CommSec - very prompt!

Quote
"Elise, if you choose to apply for a CommSec share trading account and a Commonwealth Direct Investment Account (CDIA) online through our website, there are no charges or maintenance fees to operate the CDIA. As you will be using this account for settling your trades and applying with CommSec, no monthly fees will be added.

If you choose to open a CDIA separately with the Commonwealth Bank and not with CommSec, fees and charges will apply. Charges and information will be on the Commonwealth Bank website."

So there you go!
So now the question is - why would I choose CommSec over CMC Markets?
If international markets can be accessed through ETFs on the ASX, the only benefit CommSec can really offer is fancy, easy-to-use interfaces. But the brokerage is still ridiculous - for $10,000 it's nearly a 0.2% fee, whereas CMC is only 0.1%

Here's another question:
What are my options if I don't like a broker? If all my shares are CHESS sponsored, can I just close my account with my bad broker and move to a new one?

Thanks for all your feedback so far :D

bigchrisb

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Re: Stock Broker Australia - which one?!
« Reply #10 on: February 26, 2015, 08:29:14 PM »
So now the question is - why would I choose CommSec over CMC Markets?
If international markets can be accessed through ETFs on the ASX, the only benefit CommSec can really offer is fancy, easy-to-use interfaces. But the brokerage is still ridiculous - for $10,000 it's nearly a 0.2% fee, whereas CMC is only 0.1%

Here's another question:
What are my options if I don't like a broker? If all my shares are CHESS sponsored, can I just close my account with my bad broker and move to a new one?

Thanks for all your feedback so far :D

Depending on the amount you are investing, if you are buying and holding, the brokerage is a pretty trivial expense.  I played with various options, but these days just use NABtrade and Etrade for convinience.  I used to trade fairly frequently, but of late, I'm generally making about one trade a month, and its averaging $10-$15k.  Total brokerage is something like $200 a year with the conventional providers, and maybe I could reduce this to ~$100/year with a different provider.  I figure there are bigger fish to fry in my expenses base - for example, haggling the rate on my margin loan saved something like $4,000/year.

In terms of changing brokers, yes, if they are chess sponsored, its super easy.  If they hold them on trust (such as Interactive Brokers) its a bit trickier - when transferring shares out of IB, I had to get them converted to issuer sponsored shares with CHESS, then rolled over to my existing HIN to go with the rest of my portfolio.  A HIN is a unique number for shares held in your identity with CHESS under a particular broker.   

potm

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Re: Stock Broker Australia - which one?!
« Reply #11 on: February 26, 2015, 10:04:22 PM »
I'm not sure if CMC markets has live pricing, so it may be worth it to open a Commsec account anyway so you have access to the live prices when you enter your trades in CMC markets. No fees are all to have a commsec account just sitting there with nothing in it.

If you're looking to accumulate a few ETFs on a regular basis the brokerage can add up, especially if the amounts are small.

Changing between Australian brokers is very easy. You just fill out a form and they get moved. If you really want to save money then you can start with commsec's free brokerage offer and buy all your ETFs. Then transfer them to CMC afterwards. Or you could shuffle around all the different brokers to take advantage of the free brokerage offers... I'm not sure how long before you are considered a new customer again. Not really worth the effort but I read more crazy things to save money on these boards.

EliseHearts

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Re: Stock Broker Australia - which one?!
« Reply #12 on: February 27, 2015, 07:34:20 PM »
Quote
I'm not sure if CMC markets has live pricing, so it may be worth it to open a Commsec account anyway so you have access to the live prices when you enter your trades in CMC markets.
Is live pricing really valuable even if you're not trading frequently/timing the market? If I plan on just dumping some money into some long term investments once a month, is it really important to have those live values?

Quote
If you're looking to accumulate a few ETFs on a regular basis the brokerage can add up, especially if the amounts are small.
Could you please elaborate on what you mean here?
Don't you buy ETFs the same as regular shares?

Thank you for your tips about brokers - it seems like there is a bit of value to be found by using them wisely.

dungoofed

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Re: Stock Broker Australia - which one?!
« Reply #13 on: February 27, 2015, 08:14:49 PM »
Yes you buy ETFs exactly the same as regular shares, but at $10 a pop it's actually not that cheap for frequent, small trades. eg if you bought two ETFs every month to the tune of $500 worth each, that's $20 brokerage on $1000 which is 2% that you're down before you even start, not including spreads. Over time this expense can add up.

ETFs are convenient on many levels, however.



potm

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Re: Stock Broker Australia - which one?!
« Reply #14 on: February 28, 2015, 12:47:15 AM »
When you buy the ETFs you can either set a price limit or just enter the order at the market which means whatever price so the order will go through immediately. There's usually market makers who provide liquidity with a bit of a spread but for the less liquid ETFs the spreads can sometimes be large. I would never feel comfortable entering an order without live market data, you don't know what could have happened in the last 20 minutes.

This may all sound a bit complicated but once you have it up and running, you'll catch on to how the trades work easily.

BattlaP

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Re: Stock Broker Australia - which one?!
« Reply #15 on: February 28, 2015, 07:12:08 PM »
Quick question I've had in the back of my head for a while -

I bought the majority of my ETFs in one lump last year on a nabtrade 10 free trades offer, one account for me and one account for my missus.

What are the implications of, and will I run into any issues with, opening a different account with a different bank with a similar free trades offer and buying the same ETFs with lump sums?

I'll be getting my First Home Saver money back soon enough so just thinking ahead.

potm

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Re: Stock Broker Australia - which one?!
« Reply #16 on: February 28, 2015, 08:30:01 PM »
When you make the new account at the next broker you have the option of transferring your existing HIN and shares or creating a new HIN. No problems either way.

slothman

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Re: Stock Broker Australia - which one?!
« Reply #17 on: March 02, 2015, 03:17:35 PM »
I would never feel comfortable entering an order without live market data, you don't know what could have happened in the last 20 minutes.

Is that the "Market Depth" screen where it shows you the list of buyers and sellers?

I use the market depth information to caluclate the market makers spread and put in an offer close to the market makers lowest sell price to see if they come down. When the trade gets executed, I'm not sure if the market makers cut their margin or if its because of the NAV getting repriced.

Keen to get some guidance here.

Shaz_Au

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Re: Stock Broker Australia - which one?!
« Reply #18 on: March 02, 2015, 09:11:40 PM »
Hi Elise,
I'm only new to this too. I ended up with CMC, they seem well recommended and offer $11 trades.  If you aren't day trading I'm not sure why you'd want to pay more for a full service broker or live data.

Regarding Live Pricing
With CMC if you do want live pricing and the market depth you have to pay extra or make a minimum number of trades per month ($10 or 10 trades I think).
Please note: With CMC that the pricing on the buy/sell screen is live (free).  This also contains limited market depth (the current 5 top bids and offers and the last 10 successful trades).  All other data is delayed by default.

Hope this helps.
Shaz
« Last Edit: March 02, 2015, 09:13:15 PM by Shaz_Au »

potm

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Re: Stock Broker Australia - which one?!
« Reply #19 on: March 02, 2015, 10:11:59 PM »
I would never feel comfortable entering an order without live market data, you don't know what could have happened in the last 20 minutes.

Is that the "Market Depth" screen where it shows you the list of buyers and sellers?

I use the market depth information to caluclate the market makers spread and put in an offer close to the market makers lowest sell price to see if they come down. When the trade gets executed, I'm not sure if the market makers cut their margin or if its because of the NAV getting repriced.

Keen to get some guidance here.

Yeah, sometimes you can avoid the spread or reduce it if there's someone out there who wants to sell when you are trying to buy. You risk the price moving against you while you wait though.

EliseHearts

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Re: Stock Broker Australia - which one?!
« Reply #20 on: March 02, 2015, 11:51:51 PM »
Wow - thank you all for the feedback so far, it's really helped me take action when I felt stuck.
I've since opened an account with CommSec and am on the way to an account with CMC Markets.

I figured CommSec would be a good idea, since it has a whole range of tools and information and nice interfaces etc., but I could use CMC for the actual trades.
But now I find that the sea of information on CommSec is paralysing! The thought of losing money scares me more than I thought it would!
I'm tempted to just copy Vanguard's funds and buy the top 10 in their dividend funds, hoping to replicate their index funds.
Do you have any advice for someone 'scared' of the share market?

And at risk of derailing the thread, what numbers do you guys look at and what questions do you ask before you invest in a company's shares?
I've heard that you should only buy in company's that you're familiar with and trust - does this work for you guys?


potm

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Re: Stock Broker Australia - which one?!
« Reply #21 on: March 03, 2015, 12:11:35 AM »
That's why you have the indexing strategy, it takes all that out of it. Replicating the top 10 companies from Vanguard will remove your diversification and will cost you in brokerage unless you are dealing with large enough numbers where the brokerage costs less than the ongoing management fee.

If you want to invest in individual stocks there is a lot to learn, finance, accounting, economics, the actual business and what it does, the markets it operates in, competitors and alternatives, any developments or risks impacting on it's revenue streams.

One up on wallstreet and Intelligent Investor are two books I would recommend you start reading if you wish to learn. Also a basic level of finance, accounting and economics will help a lot.

deborah

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Re: Stock Broker Australia - which one?!
« Reply #22 on: March 03, 2015, 01:20:04 AM »
The ASX has a lot of good courses that you can do from their web site for free.