Online Brokers Pick Up New Clients
Sydney Morning Herald
Wednesday May 8, 2002
Online brokers are replacing traditional brokers as the trading vehicle of choice for first-time sharemarket investors.
According to a survey from ACNielsen.consult, almost all Internet users who have decided the time is right to start playing the market have opted to open accounts online.
While traditional retail brokers still carry out the vast majority of retail trades, the long-term trend suggests online broking is the way of the future as younger, more Internet-friendly consumers start to invest in shares.
In the past two years the number of investors trading online has increased.
However, the number of investors trading with any frequency has dropped, reflecting a more cautious approach since the tech wreck two years ago.
Between June 2000 and December last year the number of online traders rose from 250,000 to 380,000.
In the same period, the number of online investors trading at least once a month increased by 25,000 to 125,000.
ACNielsen's survey of 3800 online investors found that Commonwealth Bank's CommSec is still the dominant player.
However, CommSec's market share has slipped from 45 per cent to 42 per cent as the market has grown.
Gaining market share was Etrade Australia.
It has risen 1 percentage point to 13 per cent as its partnership with ANZ continues to bear fruit.
Westpac, which enjoyed a strong surge in the first half of last year but has since seen growth level off, holds 12 per cent of the online market.
TD Waterhouse, the only well-placed broker without allegiances to a big Australian bank, enjoyed the biggest growth spurt in the six months to November 2001.
The broker picked up the client base of Charles Schwab when it retreated from online broking earlier this year.
It saw its market share jump from 4.5 per cent to 6 per cent and this excludes any trading from the Schwab investors.
``We've always believed that we'll be successful if we focus on meeting our customers' needs and we're pleased that ACNielsen.consult's findings validate our belief," said TD Waterhouse managing director Karen Buck.
© 2002 Sydney Morning Herald