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  • Writer's pictureDonnelle Brooks

How to Choose a Share Broker

Updated: Oct 25, 2023

Selecting the right share broker is a crucial step for anyone looking to venture into the world of investing. With numerous options available, it's essential to make an informed decision that aligns with your financial goals and trading preferences. In this instructional article, we'll walk you through a step-by-step process to help you choose the best share broker that suits your needs and ensures a successful investing journey.



Assess Your Investment Goals and Trading Style

Before diving into the sea of share brokers, take some time to define your investment objectives. Determine whether you are a long-term investor seeking steady growth or a more active trader looking to capitalize on short-term opportunities. Understanding your risk tolerance and preferred trading style will narrow down the list of potential brokers that cater to your specific needs.


Research Broker Reputation and Regulation

Always prioritize safety and trustworthiness when choosing a share broker. Conduct thorough research on the broker's reputation, customer reviews, and track record in the industry. Additionally, ensure the broker is regulated by a recognized financial authority, as this provides an added layer of protection for your investments.



Evaluate Broker Fees and Charges

Compare the fee structures of different share brokers to find one that aligns with your budget. Pay attention to brokerage fees, account maintenance charges, inactivity fees, and any other hidden costs that may impact your investment returns. Opt for a broker with competitive pricing and transparent fee disclosures.


Consider Trading Platforms and Tools

A user-friendly and feature-rich trading platform can significantly enhance your investing experience. Look for a share broker that offers an intuitive trading interface, real-time market data, advanced charting tools, and research resources. A mobile trading app is also beneficial for investors who prefer to trade on the go. This is where CMC Markets stand out, as opposed to a more traditional broker like Commsec.


Analyze Investment Offerings

Different share brokers offer varying investment options. Ensure the broker provides access to the markets and investment types you are interested in, such as stocks, exchange-traded funds (ETFs), bonds, options, and more. Additionally, check if the broker offers international trading if you plan to invest in global markets.


Customer Service and Support

Responsive and reliable customer support is vital when dealing with financial matters. Check the broker's customer service channels and hours of operation. Ideally, they should offer various means of communication, such as phone, email, and live chat, to address any issues or queries promptly. For example, Raiz and Spaceship both have great customer support, but I have discovered this due to having problems using their platform. Commsec customer support is a little slower, but I have only needed to contact them to close an account.



Test Account Opening and Account Features

Some share brokers offer demo or trial accounts, allowing you to familiarize yourself with their platform and features before committing. Take advantage of this opportunity to evaluate the account opening process, user interface, and available tools.


Explore Educational Resources

A reputable share broker should provide educational resources to help investors enhance their knowledge and skills. Look for brokers that offer webinars, tutorials, market analysis, and educational articles to empower you with valuable insights.


Choosing the right share broker is an essential foundation for your investment journey. By following these step-by-step guidelines, you can find a broker that suits your investment goals, trading style, and budget. Prioritize reputation, regulation, fees, and platform features to make an informed decision. Remember, the right share broker will not only provide access to financial markets but also support your growth as a knowledgeable and confident investor. Take the time to research, compare, and select wisely to embark on a successful investing experience.


5 Options to consider when choosing a Share broker in Australia

Choosing the right share broker is paramount for any investor seeking to enter the Australian stock market. With a plethora of options available, making the best decision can be daunting. In this section, we'll compare the top five share brokers in Australia, highlighting their unique features, fees, investment offerings, and customer support. By the end of this guide, you'll be equipped to select the ideal share broker to suit your investment goals and preferences.


CommSec

CommSec, a subsidiary of the Commonwealth Bank of Australia, is a well-established share broker known for its extensive investment offerings and user-friendly interface. With access to shares, ETFs, options, and warrants, CommSec caters to both novice and experienced investors. Its comprehensive research tools and educational resources empower users to make informed investment decisions. CommSec's mobile trading app ensures investors can stay connected to the markets on the go.



IG Australia

IG Australia is a leading online broker renowned for its advanced trading platform and low-cost pricing structure. With a wide range of tradable assets, including shares, indices, forex, and cryptocurrencies, IG Australia appeals to traders seeking diverse investment opportunities. The broker provides clients with access to professional-grade charting tools, real-time market data, and a risk management suite. Additionally, IG Australia offers CFD trading, allowing users to trade on margin with leverage.


CMC Markets

CMC Markets is a top-tier share broker with a strong global presence. One benefit of CMC Markets is that the stocks are CHESS Sponsored. Known for its competitive pricing and robust trading platform, CMC Markets offers investors access to shares, indices, commodities, and forex markets. The broker provides an extensive range of technical analysis tools and market research resources, ensuring users have the data needed to make well-informed trades. CMC Markets also offers a mobile app for on-the-go trading convenience.


SelfWealth

SelfWealth has earned a reputation as a cost-effective and innovative share broker in Australia. Known for its flat-fee brokerage structure, SelfWealth appeals to frequent traders looking to minimize costs. The broker offers a unique peer-to-peer trading community, where users can share trading insights and performance data. SelfWealth provides access to ASX-listed shares, ETFs, and warrants.


Saxo Capital Markets

Saxo Capital Markets is a globally recognized share broker with a strong presence in Australia. The broker caters to both individual and institutional clients, offering a wide range of investment products, including shares, CFDs, forex, and commodities. Saxo's trading platform, SaxoTraderGO, provides a user-friendly interface with advanced charting tools and research resources. The broker also offers access to international markets, allowing investors to diversify their portfolios globally.



SelfWealth vs CMC Markets

Many people are looking for a comparison between these two services. As CMC Markets is now CHESS Sponsored, I would choose them over SelfWealth. They key difference in CMC Markets vs Selfweatlh is CMC Markets do not charge brokerage fees. They instead make money from spreads. In contrast, Selfwealth has a $9.50 flat brokerage fee.


Best CHESS Sponsored brokers in Australia

It is important to choose a CHESS Sponsored broker, as if anything happens to the company itself, you will still retain ownership of the shares. This is a list of the top CHESS Sponsored brokers in Australia:


  • CMC Markets

  • Commsec

  • SelfWealth

  • Pearler

  • Stake

  • Saxo Markets


To choose the best, consider your options and needs. Commsec is my choice, Pearler is more automated but CMC Markets is the cheapest.


The Bottom Line

Selecting the right share broker in Australia is a critical step in your investment journey. Each of the top five share brokers discussed in this article offers unique features and strengths, catering to different investor profiles. CommSec stands out for its extensive investment offerings and user-friendly interface, while IG Australia excels in advanced trading tools and low-cost pricing. CMC Markets boasts a global presence and robust research tools, while SelfWealth appeals to cost-conscious traders with its flat-fee brokerage. Saxo Capital Markets offers a vast range of investment products, including access to international markets.


To make the best choice, consider your investment goals, trading style, and budget. Evaluate each broker's fees, available assets, trading platforms, and customer support. With the knowledge gained from this comparison guide, you're well-equipped to select the share broker that best aligns with your needs and sets you on the path to successful investing in the Australian stock market.

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