Online trading industry research firm Investment Trends has unveiled its latest survey on the stockbroking firms operating in Australia. The company collected information from over 10,500 respondents in order to gather a large enough sample to provide the industry with an in-depth look at the stockbroking industry in the country.
Online investors were asked a list of questions designed to extract information on the different aspects of the offerings of online stockbrokers.
Stocks Trading Highest Since GFC
According to the findings for the second half of 2017, the number of online retail investors has climbed to a new record high of 645,000. The number is higher by almost 7 percent when compared to the same period of last year.
The findings in the report justify the entrance of Monex into the Australian stockbroking space in the summer of last year. Finance Magnates exclusively reported on the matter as the company was contemplating its entrance into the market.
“2017 was a positive year for retail online investing in Australia, with investor numbers rising to their highest level in the post-GFC era,” said Irene Guiamatsia, Research Director at Investment Trends.
“At the same time, the ALL ORDS also soared, providing strong support to the growth of the market,” she added.
Bell Direct Takes the Lead
Australian online brokerage Bell Direct took the lead in several categories of the Investment Trends survey. Overall satisfaction, customer service, and education materials were the aspects of the company’s offering.
CMC Markets took the lead in the value for money and functionality of the website categories, while the mobile trading platform of CommSec led to the company taking the lead in broker innovation recognition.
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Market leader Bell Direct, CMC Markets Stockbroking and IG have the most satisfied clients overall.
Rising Stocks Positive for Brokers
The number of clients and the value of client assets have been increasing throughout 2017 as stocks rose and Australians were encouraged to start investing online. This was in stark contrast to traditional triggers for increases in trading activity such as downsizing or retirement.
“Many DIY investors rely on gut feel to guide their investment decision making, and recent healthy sharemarket performance has strengthened their preference for making decisions this way. The challenge for brokers is to turn the horde of novice investors into educated clients who invest from a position of knowledge,” explained Guiamatsia.
Innovation and Switching Activity on the Rise
Clients have widely recognized the efforts of stockbrokers to innovate and provide added value to their offerings. One-fifth of online investors are recognizing innovations or improvements from their stockbrokers.
“Online brokers are stepping up, and clients are taking notice. Market leader CommSec takes the lead with over one in four clients noticing useful new initiatives, followed by Bell Direct and CMC Markets,” explained Mrs Guiamatsia.
At the same time, a total of 29,000 clients have changed brokers. The figure is up nearly 50 percent when compared to the first six months of the year. The diversification of an offering can trigger a change in the preference of a client.
Industry-wide, a total of 84 percent of clients rated their overall satisfaction as ‘good’ or ‘very good’. The figure is consistent with previous iterations of the survey.
“Brokers are servicing their clients well, but industrywide client satisfaction has plateaued in 2017. Opportunities abound for brokers to strengthen client satisfaction – and retention – by focusing on service elements that matter the most,” concluded Mrs Guiamatsia.