Consumers turn to online broking in record numbers

Financial planners are losing a significant portion of their business to technology as the use of online stock brokers skyrockets.

Fresh ACNielsen Research has shown that the use of retail share traders increased by 10 per cent in the past six months, with most of that growth in online trading.

According to the survey a record 545,000 Australians are now trading online.

Of those surveyed who held a share trading account, 82 per cent said their account was managed by an online broker while just 18 per cent was managed by a full service broker.

This result came despite clients of full service brokers receiving better returns than those who went online.

While CommSec holds over 40 per cent of all retail brokerage accounts , E*Trade has been dominant in the battle for new accounts — racking up 42 per cent of all new accounts over the past six months.

The new findings follow on from research released last week by ACNielsen which showed that 40 per cent of investors currently seek advice from a financial adviser, down from 60 per cent two years ago.

The plummet in the use of financial advisers came despite satisfaction with planner services rising from 71 per cent two years ago to 80 per cent when the survey was released last week.

In both ACNielsen reports the increased use of online brokers and the decline in demand for financial advisers was attributed to strong market performance.

ACNielsen associate director Glenn Wealands also pinned the rise of do-it-yourself investing on online service’s higher capabilities, lower access fees and improved research information.