Australian Online Brokers Offer Trading Incentives As Competition Intensifies

Philip Morton, Investors Offshore.com

15 February 2001

The online broking industry is becoming increasingly competitive the world over, and Australia is no exception. In the past few days, two online brokers have announced that they will cut their charges for a certain period in order to entice investors to use their services.

Earlier this week, Commonwealth Bank of Australia said it will halve brokerage charges for certain clients of its discount broking arm, Commonwealth Securities Ltd (ComSec), a move which could trigger price cuts at other discount brokers eager to prevent ComSec from expanding its dominant share of online trading in Australia. ComSec will slash its charges between March and June 2001 for clients who do more than 14 Australian share trades in any month. Charges could be as low as A$8.15.

Many of Australia's regular brokers offer online services at a discount to their full service charge. There is also a growing number of pure discount brokers, including E*Trade Australia Ltd and Charles Schwab Australia Pty Ltd, a franchisee of US giant E*Trade Group. Charges are much less than in the past - some online brokers offer trades at less than A$20. ComSec says that five years ago, investors were normally charged around A$200 or A$250 for trades.

In response to ComSec slashing its prices, Charles Schwab Australia plans to offer investors free trades during March. Clients who have A$10,000 in cash or assets will be able to trade shares with Schwab for free, be it online, by telephone or in person.

.

Recommended

Write a comment