Investment Trends has recently released its 2015 Second Half Online Broking Report, a twice yearly in-depth study of Australian online share investors’ attitudes and investing habits, based on a survey of 13,910 investors and traders, concluded in November 2015. Key highlights include:
- First-time share traders fuel growth of the online broking industry through 2015
- Australian online brokers rank first for client loyalty among seven markets covered by Investment Trends. Switching levels drop to four year low
- Successful brokers are innovating to differentiate their offering
First-time share traders fuel growth of the online broking industry through 2015
After growing by a net 25,000 traders in the first half of the year, the number of active online share investors increased by another 15,000 between June and November 2015. 635,000 unique Australian investors placed at least one share trade through an online broker in the 12 months to November 2015, up from 595,000 in November 2014 (7% growth year on year). This growth was largely fuelled by 129,000 investors placing their first-ever online trade in 2015, up from 82,000 through 2014.
“The market had robust growth throughout 2015, underpinned by an influx of first-time online investors,” said Irene Guiamatsia, Senior Analyst at Investment Trends. “Over the course of the year, there was a distinct change in what attracted new traders to investing online. While the Q1 bull run fuelled optimism among those who began trading earlier in the year, the second half of the year was more about investors on the lookout for value and buying opportunities.”
Australian online brokers rank first for client loyalty among seven markets covered by Investment Trends. Switching levels drop to four year low
Out of seven key markets covered by Investment Trends, Australia is the only one where switching declined over 2015. In the year to November 2015, only 27,000 online investors left a broker and continued trading elsewhere (4% of online investors). This places Australia first by client loyalty to their broker. These low levels of switching are unsurprising, given Australian online investors rank among the happiest in the world – second only to the US (see table).
| Singapore (Aug ’15) |
Germany (Apr ’15) |
US (Jun ’15) |
France (Apr ’15) |
Hong Kong (Jan ’16) |
UK (Jul ’15) |
Australia (Nov ’15) |
|
| Switching rate |
12% (+4% ) | 10% (+2%) | 9% (+3%) | 9% (+1%) | 7% (+2%) | 9% (+/-) | 4% (-2%) |
| Avg sat. score |
65% | 72% | 79% | 66% | 62% | 74% | 74% |
“As the pool of switchers contracts, competition is likely to focus on those new investors that are entering the market in large numbers,” said Guiamatsia.
Successful brokers are innovating to differentiate their offering
nabtrade’s launch of their integrated international share offering (April), Saxo’s new Trader GO platform (June) and CMC Markets Stockbroking’s Pro platform (October) are only a few high profile platform innovations introduced during 2015. Market leader CommSec has been innovating across the board, with their clients particularly receptive to the MyWealth all-in-one integrated portfolio visualisation and education tool.
Industry-wide, more than one in two (57%) online investors are able to mention at least one broker innovation they found useful. This places Australia second on innovation recognition among seven key markets covered (see table).
| France (Apr ’15) |
Australia (Nov ’15) |
UK (Jul ’15) |
US (Jun ’15) |
Germany (Apr ’15) |
Singapore (Aug ’15) |
Hong Kong (Jan ’16) |
|
| % who noticed innovations^ | 62% | 57% | 50% | 50% | 48% | 47% | 26% |
^ This is based on an unprompted question
“Intense competition keeps Australian brokers ahead of most of the world for innovation,” said Guiamatsia. “Brokers are increasingly seeking to strengthen the value of their product and differentiate their offering. Innovation is helping them achieve this and sustain high client satisfaction levels.”
Every half year, Investment Trends recognises the best performers in select categories, based on client satisfaction ratings. The brokers who received the highest ratings in six key service elements assessed were:
| Best rated in each category | |
| Overall satisfaction | Bell Direct |
| Customer service | Bell Direct |
| Mobile platform | CommSec |
| Platform functionality | Bell Direct |
| Value for money | CMC Markets Stockbroking |
| Education materials | Bell Direct |
About the report
This report provides a detailed analysis of the Australian online broking market, examining attitudes and behaviour of current and next wave online share investors.
Based on a survey of 13,910 traders and investors, the Investment Trends 2015 Second Half Online Broking Report is the largest and most comprehensive independent study of the online trading market in Australia.
About Investment Trends:
Investment Trends a leading researcher in the online stockbroking, CFD and retail FX markets globally combining analytical rigour and strategic thinking with the most advanced research and statistical techniques to help clients gain a competitive advantage.
They have over 10 years experience in researching the Australian retail wealth management and global broking markets from which to provide new insights and decision making support to over 200 leading financial service businesses globally.
Investment Trends’ clients include a number of global banking organisations, all major CFD providers and online brokers as well as industry regulators, investment platform providers, industry associations and financial planning software providers.
