Say What Wednesdays

Which platform should I choose for investing and trading?

Welcome to Finance and Fury’s ‘Say What Wednesday’.

Today’s question comes from Braden, “What are the tools for young people to invest in exchange trading funds or the wider share market? Can I only use Commsec or Nabtrade, or are there better options out there?”

Let’s start by considering the following features of competing online share brokers;

Fees

  • You’re charged brokerage for every buy or sell transaction, with many fees around the $20 mark.
  • Fees may be calculated as a percentage of the transaction amount for larger trades.
  • Also charge an ongoing annual or monthly fee on top of this, especially with the more feature-dense platforms.

What can you trade? 

  • Shares – Australian and International shares (Direct, LICs, ETFs)
  • Others – CFDs, forex, indices, currencies and much more, so look for this functionality if it’s important to you.

Research & Access to market data

  • Daily market reports, buy and sell recommendations and company financial reports can all provide useful information.

Trade options

  • You place orders at market and/or at limit, and are stop loss orders an option to add more flexibility to your trading?
  • Some accounts allow short selling

Reporting. Check what reporting tools each platform offers to help you track your trades, record dividends and pass on any relevant information to the ATO at tax time.

Margin loans. A margin loan lets you borrow money to invest and uses your shares as security. If you’re looking to borrow money to build your portfolio, check to see whether the platform provider offers margin loans. Don’t forget, this does comes with additional risk.

Education
Does the platform also feature a range of educational tools and resources, such as how-to guides and webinars, to help you get more out of your trading account?

 

Platforms
So, let’s look at some of the platforms available. Which one is right for you depends on what you want to achieve.

  1. Either you will be a fulltime trader, or a casual investor
    • Different types of accounts will suit each
  2. Traditional (the banks)
    • CommSec – Below $10k, $10, Below $20k, 0.11% above
    • nabtrade
    • Westpac

 

Your needs
If you’re just a casual investor, do you really need a share trading platform that offers a whole lot of complicated bells and whistles?

Some platforms targeted at entry-level traders may not have all the features an experienced investor needs.

Monthly Fee Standard Broking Margin trading IPOs International
IG Share Trading $0 $8 or 0.10%, whichever is higher Yes Yes Yes
SelfWealth $0 $9.50 regardless of trade size No No No
CMC Markets $0 $11 or 0.10%, whichever is the greater (for 11 trades or less per month) Yes Yes No
Saxo Capital Markets $0 $6.99 Yes No Yes
HalifaxOnline $0 $14.95 Yes Yes

Yes

*Under $20,000 trade size

 

  • For larger trades – Self wealth is good – Flat for $9.50
  • Important: Doesn’t matter massively – it’s not where you buy, it’s what you buy!

Thanks for the question Braden! Any other questions go to https://financeandfury.com.au/contact/

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