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Retail online investor numbers soar: Investment Trends

Online investor numbers in equities and exchange-traded funds (ETFs) have soared over the last year, with mobile platform functionality being a key driver behind investors’ platform choice for trades, Investment Trends has found.

The research house’s 2018 First Half Online Broking Report, which surveyed 11,702 traders and investors, found the number of Australian retail online investors had surpassed 700,000 for the first time.

As at May 2019, 720,000 Australians had placed at least one share or ETF trade in the last year, up from 645,000 six months ago.

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“In the first half of 2018, the three engines of growth were firing on all cylinders,” Irene Guiamatsia, research director at Investment Trends, said.

She said this highlighted the low dormancy, strong client reactivation, and healthy inflows of new-to-market investors observed in the industry.

Mobile platform functionality proved to be an increasingly important differentiator in broker selection, both naturally among millennial investors but also among older demographics. One in six online investors said this feature influenced their choice of main broker, a jump on six months ago.

Guiamatsia said while CommSec dominated this area, utilising its first mover advantage, IG and CMC Markets were providing strong competition.

Finally, the report found that switching activity remained low across the industry, with just four per cent of online investors moving to another online broker in the last year. Guiamatsia said this reflected the improved retention efforts of the big four brokers.

Switching among frequent traders (those who placed four or more trades per month) grew over the last year, however, more than doubling in percentage posts to hit nine per cent.

“The frequent trader segment will continue to be a key battleground for online brokers,” Guiamatsia said. “Brokers that most effectively identify and respond to the needs of frequent traders will benefit.”




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