Online brokers under pressure to prove value
Heightened volatility in investment markets is heaping pressure on online brokers to prove their worth to clients, new research reveals.
Data from Investment Trends showed that Australian investors had shied away from the sharemarket in the second half of 2014, as upheaval saw fear levels rebound and dent return expectations.
Investment Trends analyst, Irene Guiamatsia, said research had found that traders wanted brokers to help them with stock picking.
"Low market return expectations means investors are finding it more challenging to spot good trading opportunities," said Guiamatsia.
"Towards the end of year, heightened volatility tested investor confidence and placed brokers under increased pressure to demonstrate value for money and to help investors identify opportunities."
Guiamatsia added that in the six months to November 2014, smaller players in the online trading market had started to expand their positions.
However, CommSec remained the dominant player with a 42 per cent primary market share (down from 44 per cent in June 2014).
During the second half of 2014, 111,000 Australian online trading accounts fell dormant, however, their inactivity was offset by 36,000 new entrants and 85,000 dormant investors returning to the market.
AUTHOR
Nicholas O'Donoghue
Recommended for you
State Street Global Advisors has made an equity investment in Ethic, a platform helping financial advisers to produce bespoke portfolios, reflecting the greater client demand for customised portfolios.
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
