Investments Trends’ first Global Online Broking Report surveyed 92,000 participants in six countries – the United States, UK, Germany, Australia, France and Singapore – and found Australian clients to be the most loyal.
Just seven per cent of Australian broking clients switched their main broker in the 12 months to December 2012, a lower percentage than any other market and half that of Singapore, despite only mid-range satisfaction scores.
“Looking around the world, there is generally a strong link between lower client satisfaction and higher levels of switching,” said Investment Trends chief executive Mark Johnston. “But Australia bucks that trend.”
Australians are among the world’s most enthusiastic online traders; 550,000 Australians, or 3.2 per cent of the adult population, traded shares online last year, second only to Singapore.
Yet only 72 per cent of Australians rated their main online broker as good or very good for overall quality of service, compared to 85 per cent in the United States and 88 per cent in Germany.
“Australian traders remain loyal despite only mid-range satisfaction across a range of measures, including customer service, value for money, trading ideas and strategies,” Mr Johnston said.
However, Australian brokers ranked best in the world for online reporting of positions and transactions, and were second after the United States peers in terms of website functionality.
“Nonetheless, our analysis shows Australian brokers still have some room for improvement before they match world’s best practice in every aspect of their service,” he said.
Of the 72 brokers ranked by satisfaction, the United States accounted for the top four and nine of the top 10, with Vanguard taking top spot and Germany’s Interactive Brokers at five the only non-US broker in the top 10.
The Australian market – concentrated by global standards with the top five brokers accounting for 84 per cent of clients – was clustered around the middle of the rankings. Bell Direct was the standout at 11, ranking first in two categories: ‘Trading ideas and strategies’ and ‘Reporting positions and transactions’.
Bell Direct chief executive Arnie Selvarajah said the rankings reflected positive feedback received from customers and the online broker’s continued focus on creating the most secure and cutting edge capability for online traders.
“At Bell Direct we stay abreast of the latest technologies to enhance our existing features as well as introduce new features, so our customers have the best opportunity to secure a trading edge,” he said.
CMC Markets Stockbroking, CommSec and ETRADE were all ranked in the 30s on satisfaction, but CommSec is the most successful broker globally based on national market share, the report found.
“CommSec is a uniquely successful firm globally. No other online broker dominates its market the way CommSec does, with half the market by primary relationships. The closest comparison is Phillip’s Stockbroking in Singapore, with a 31 per cent market share,” said Mr Johnston.
“CommSec also has a relatively low attrition rate compared to its peers. Combined with its mammoth market share, that helps to account for the low level of churn in the Australian market.”
