Aust fourth in broking satisfaction: report

26-Jun-2014

By Krystine Lumanta

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The Australian broking market ranked fourth in terms of overall satisfaction, despite having the most loyal traders in the world, according to the latest Investment Trends report.

The “2013 Global Online Broking Report”, released yesterday, was based on an in-depth study of 90,000 traders and investors from Australia, the United States, the United Kingdom, Germany, France and Singapore.

It revealed the US led the world in satisfaction, with an overall composite satisfaction score of 79 per cent, followed by Germany at 74 per cent and the United Kingdom at 69 per cent.

Australia was ranked fourth at 68 per cent, with Singapore and France trailing at 66 per cent and 62 per cent respectively, the report said.

The Australian market size was 585,000 investors, or 3.4 per cent of the adult population that traded shares online at least once in the previous 12 months.

The US dominated the industry league tables for satisfaction, coming first in all 12 service areas, Investment Trends Australian online broking analyst Jimmy Kiely said.

“With 5,800,000 current online share investors – those who have traded shares at least once in the last 12 months – the United States is by far the world’s largest online broking market and United States brokers have leveraged that scale to provide a much wider range of products and a higher level of service than their global peers, while still remaining financially viable,” Kiely said.

However, the report found Australian traders were the most loyal in the world, even though Australian brokers received only mid-range client satisfaction scores on a number of key indicators.

During the 12 months to December 2013, just 7 per cent of Australian investors using online brokers switched their main broker, which was one of the lowest levels of switching, equal to the US.

“CommSec has a relatively low attrition rate compared to its peers,” Kiely said.

“Combined with its large market share, this helps to account for the low level of churn in the Australian market.”

The Australian market was also the most concentrated by world standards, with 84 per cent of current online investors using one of the top five online brokers as their primary broker, the report said.

The largest online broker in Australia, CommSec, had an unequalled 44 per cent share of primary relationships.

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