The Best Share Trading Platforms Australia 2022 - Canstar
Source: Canstar. Fees correct as at 18/2/22.
These are the 5-Star Rated products according to Canstar Research for investors who trade 30 times a month on average. The table is sorted by price for a $15k trade (lowest to highest), then alphabetically by provider name. None of these providers charge ongoing account fees for their 5-Star Rated products at the time of writing.
| Company | Product | Fee for a $15k trade |
|---|---|---|
| IG Markets | Share Trading | $7.50 |
| CMC Markets – Share Trading | Premium Trader | $11.25 |
| CMC Markets – Share Trading | Active Investor | $12 |
| Interactive Brokers Australia | Share Trading | $12 |
Source: Canstar. Fees correct as at 18/2/22.
Overall Broker of the Year – CMC Markets
CMC Markets won Canstar's most recent Broker of the Year Award, based on its performance in all three investor profiles. Canstar Research said CMC Markets had market-leading product features in trade, company information and security.
Among the features CMC Markets' online share trading platform offers investors is the ability to invest in domestic and international shares, options, exchange traded funds (ETFs), managed funds and bonds; it also offers access to live data, unlimited free conditional orders, tax and portfolio reporting tools and risk management tools.
How to find the best online share trading platform for you
Based on the criteria used to determine the top-rated platforms in Canstar's Online Share Trading Star Ratings and Awards, here are three steps you could consider when deciding on the best share trading platform for you.
- Understand what type of investor you are
- Compare fees
- Look at the features and services you get from the platform
Understand what type of investor you are
The platform that ends up being the most suitable for you could be heavily influenced by your investment goals and trading habits. As an example, how frequently you buy and sell shares or other types of investment assets can have an impact on the fees you're charged per trade. Some platforms and products also give investors access to a variety of asset classes and markets, while others offer a more straightforward suite of options.
Canstar's Online Share Trading Star Ratings and Awards methodology outlines some of the factors that may be of particular value to different types of investors.
Casual investors tend to buy and sell shares occasionally (around once a month) and often use a long-term strategy to review their investment portfolio. When selecting an appropriate broker, comprehensiveness of investment tools is typically not the primary factor, with education, ease of use and cost generally being among the more important considerations.
Active investors tend to buy and sell shares more frequently than casual investors (between twice and 10 times a month) and may wish to have the ability to invest in managed funds. They typically use the latest market information and analysis data and reports to decide on their portfolio holdings. The comprehensiveness of research tools is often an important factor in selecting the best broker for them. Due to a higher trading frequency, cost tends to be important as well.
Traders tend to buy and sell shares very frequently and often use the latest market information to determine their portfolio holdings. When selecting an appropriate broker, being able to access derivatives (a more complex form of investing product compared to shares) can be an influential factor. Due to a high trading frequency, the availability of a dynamic trading platform (more on this to come) and cost are usually key considerations for this type of investor.
Compare fees
Share trading platforms typically charge investors a fee each time they buy or sell shares, while some may also charge an ongoing account-keeping fee.
The way fees are charged can vary depending on the provider you choose. Some platforms charge a set dollar fee per trade, while for others the fee is a percentage of the value of the trade. In some cases, the fee will be a set dollar fee for trades up to a certain value and a percentage-based fee for higher-value trades.
As well as comparing providers based on the fees they charge, it's worth watching out for how these fees are charged, as this can impact your investment returns in the long term. For example, paying a set dollar fee (as opposed to a fee that's a percentage of the trade value) for low-value trades could end up being an expensive way to trade, whereas the opposite is true for high-value trades.
Of course, the fee level itself is just as important and can vary massively depending on the provider you choose. For example, among the share trading platforms on Canstar's database, the lowest fee for a $15,000 trade is currently $3, while the highest is $33 – a difference of 1000%. This fee example is based on a hypothetical investor who trades once per month on average.
Similarly, there can be a huge difference between the ongoing fee levels charged by different platforms, such as account-keeping fees. Using the same example investor profile as above, the cheapest ongoing fee is $0 per month, while the highest is $111 per month among the platforms on Canstar's database. Bear in mind that some platforms may waive certain ongoing fees depending on how you use your account. For example, if you trade frequently, the ongoing fee could be reduced. The catch is at least some of these possible ongoing fee savings could be offset by trading costs.
Look at the features and services you get from the platform
The overall value you get from your platform is typically determined by the fees you're paying plus what you're getting in return. That's where the features and services on offer come into the equation. These are the features that Canstar's researchers look at when assessing online share trading platforms.
Opening: How easy is it to apply to open the account and get set up initially?
Deposit and settlement: Does the provider make it straightforward to deposit funds into your account to start trading with?
Research: What tools does the platform offer to enable investors to carry out research that will help them decide how to invest? Research tools can include charting tools that let investors see the past performance of a stock or index over time, information about particular listed companies, market information and trends, dynamic trading information that updates automatically, and automated alerts with timely information.
Trading features and tools: What markets does the platform offer access to – for example, can an investor buy and sell shares in international markets as well as the Australian Stock Exchange (ASX)? Does the platform give investors the ability to place conditional orders when buying or selling shares (e.g limit orders that restrict how much you are prepared to pay for a particular trade)? Additionally, does the provider offer access to margin loans, a lending product that allows an investor to borrow money to buy shares?
CHESS: Will the online share trading platform register your ASX share trades with the Clearing House Electronic Subregister System (CHESS) which records the transfer of a share's legal ownership when a trade is made? Some providers offer this automatically, which can make it easier for investors to keep track of their holdings.
Account management: How easy is it to access and use the account (e.g. through a mobile app), what security features does the platform provide and what tools does it offer if you are looking for reports to see how your portfolio is performing?
Customer service: Does the platform offer a high level of customer support for users who need it, and what educational tools does it offer for those looking to become more informed investors?
Closing: At the end of your journey as a user, how easy is it to settle and close your account?
Frequently asked questions about online share trading platforms
Which trading platform is best for beginners in Australia?
Beginner investors in Australia often have different needs compared to established investors. This may affect which share trading platform ends up being the best for them. Beginner investors may be particularly interested in the customer support and educational resources available through their platform of choice as they embark on their investment journey. Cost per trade can also be a big factor, particularly for beginners who are investing small amounts. This is because low-value trades are often subject to a set dollar amount fee, which can end up making up a relatively large portion of the trade value.
What is the cheapest trading platform in Australia?
At the time of writing, Stake offers the cheapest trading fee of $3 for a sample $15,000 trade of Australian shares, based on the range of providers on Canstar's database. Stake's fee is the same regardless of the value of the trade, meaning its $3 fee would account for a higher percentage of a low-value trade. Like many of the providers on Canstar's database, Stake does not charge an ongoing fee to users at the time of writing. Bear in mind that other fees may apply to Stake users and different fees apply to the platform's service for investors buying shares in stocks listed in the US.
Remember, too, that when choosing a share trading platform, price is just one of the considerations, and the cheapest platform may not necessarily be the best one for your situation.
Main image source: GaudiLab/Shutterstock.com
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