Smaller online broking platforms are seeing increased interest as a result of above-average trading volumes prompted by COVID-19.
This would be likely to cause a structural shift in Australian broking markets as a result of client ‘stickiness’ with their broking provider.
One firm that had seen strong growth was SelfWealth which reported quarter-on-quarter growth of 44% in active traders on its platform while operating revenue grew 100%.
Emanuel Datt, managing director and chief investment officer of Datt Capital, said: “We believe the company will be able to maintain its strong growth momentum given the market and product fundamentals whilst increasing the 'monetisation efficiency' of its platform.
“We expect this increase in monetisation to be driven by several organic growth initiatives the company has been working on that are projected to be rolled out over the next six months.”
The company was working on several initiatives to increase its scale including a revamp of its mobile application and the launch of US equity trading via the SelfWealth platform which would enable Australian investors to purchase direct shareholdings in companies like Amazon and Google.
“One observation we have seen in high growth sectors is that scale begets scale,” Datt said.
“As the user base grows and broadens from its initial dominant user demographic, we often see the next leg of growth driven by strong uptake by broader mainstream society attracted by a compelling product offering. We believe we will observe a similar dynamic with SelfWealth going forward.”