Australia’s cheapest broker launches: Is it CommSec’s killer?
Australia's lowest fee for US and ASX trading has arrived, but what will it mean for the market?
The self-proclaimed CommSec killer has launched with investors now able to trade Australian (CHESS-sponsored) stocks for just $3 per trade, one of the lowest on market.
Aussie trading app Stake announced it is making its share trading platform, with investors able to trade for a limited time for $0 brokerage.
And while it probably won't kill the Big Four bank's platform it can lay claim to being significantly cheaper.
Noting feedback from a 6-week trial, Stake founder and CEO Matt Leibowitz said:
"Those on our beta were rewarded with $0 brokerage on ASX trading until the end of the year – a benefit we're extending to everyone."
From 1 January 2022 Stake customers will be charged $3 per trade.
This is compared with larger brokers such as CommSec starting from $10 per trade.
"The feedback from our beta customers has been amazing with thousands of them making the most of free brokerage to flex their investing muscles on Aussie tech unicorns, bluechip Aussie brands and more," Leibowitz noted.
How does it work?
Stake has previously confirmed to Finder that stocks will be CHESS-sponsored.
This is the registration system that the Australian Securities Exchange uses to register stock ownership.
With the alternative "custody" model, ownership is recorded by the broker.
We reached out to Stake to get a few more details. Here's what it said:
- Each investor will be assigned their own holder identification number (HIN) on CHESS.
- The $3 brokerage is a flat fee, regardless of how much you invest or how often you trade.
- Fractional share trading will not be available at this stage for ASX shares.
- You can trade from $10, but you must have at least $500 invested in ASX-listed companies.
What's the catch?
Well, there's no catch to this one. Stake delivers what you would think.
It is a straightforward, easy-to-use platform that will provide you with basic trading information.
The platform doesn't have all the bells and whistles.
While you can pay for some of these features through Stake Black it's basic trading platform won't give you broker recommendations, technical analysis tools or research and education built in.
Are others jumping on board?
Since its launch in 2017, Stake has grown and now has around 400,000 customers.
The CEO notes that its cheaper options and ease of transfer from other brokers could be attractive prospects for investors.
"In just a few weeks, a 50,000-plus waitlist for beta became tens of thousands of activated customers, feeding back their experiences to us. It's been humbling and has strengthened our resolve and desire to do better for Aussies," Mr Leibowitz said.
"We've listened to customers. They want CHESS sponsorship, tick, affordability, tick, and a slick, easy-to-use, interface, tick. Ultimately it's about control and the freedom to invest on Wall Street and the ASX in the same place."
"With ASX, investors are getting everything they need – access to more than 2,000 companies and exchange-traded funds (ETFs), instant funding into an AUD wallet and a dedicated dashboard for their Australian holdings."