Competitors already in the online broking arena do not seem too perturbed by its arrival. Ian Struthers, managing director of TD Waterhouse Investor Services, commented: 'We're glad to see they're more expensive than we are, which means we give better value to our customers for all the products we offer at a considerably lower price.'

In fact, the HSBC-Merrill venture will charge A$29.95 (US$16.28) a trade, even though a price war this year cut online trading fees in half to as low as A$15. There are more than a dozen online brokers in Australia already, including Charles Schwab, which last month set up shop offering trades at A$30 each.

Scott Walters, chief executive of Merrill-HSBC, said its clients will be willing to pay more for its services than for the cheaper offerings of its rivals: 'They are K-Mart kind of offerings', he said of rival brokers. 'No other online broker can offer the same quality online research that we're providing from Merrill Lynch and HSBC.'

Merrill-HSBC plan to open five walk-in investment centres in Australia in the next 12 months. It already has 20,000 clients through the existing HSBC direct investor website.