Firstly I'm new to the forum So hello.
Out of all the online investment community forums for Australia this is the only one I've seen with a dedicated broker section so I thought I'd use it as an opportunity to direct some broker related questions.
I recently started as a graduate in 2009 and so have been buying and selling shares for a good yr or so. I use westpac's online brokerage website as my parents were using that during my younger years. I've been putting it off for awhile but I"m looking to switch to cheaper brokerage ( I trade only shares by the way). At the moment the $29.95 for westpac for each buy or sell order really eats into margins. especially due to my savings and typically $2k-6k trades (it used to be 2-4k when i first started but as times gone buy I can afford bigger holdings).
I was always interested in the bell direct hearing it was $15 one way. But recently CMC markets has been advertising and I saw it was $9.90. So basically I wanted to hear your opinions on these brokerage websites. From what I gather if you're just merely buying/selling what broker you use doesn't matter? (Correct me if I'm wrong) or is there a substantial difference in services/platform/functionality between online brokers? As an accountant I've noticed commsec and some other brokers looking similar to westpacs online layout so I assume they base their operations of a generic platform (although I don't understand these technicalities well).
Amongst other considerations of Bell vs CmC I note the following questions:
1) The use of the term 'CHESS sponsorship'. WIth Westpac I was signed up to CHESS and got my own HIN. I assumed all brokerage websites now sign you up with a new CHESS (or is it HIN) when I join? Noting posts on these forums you may not be CHESS Sponsored correct?
Does CHESS Sponsorship indicate that legal ownership rests with me (as it is in my own CHESS number/name) as opposed to non chess sponsorship? I'm wary of recent financial collapses (there was one story i remember hearing about ANZ actually having people's shares as collateral, so when this brokerage firm collapsed client's were unaware that in actual fact the shares weren't theirs. Others may know just who /what case this was).
To me as a graduate this is quite important. Can someone explain the specifics of legal ownership in relation to bell or CMC defaulting? As their CHESS sponsored I assume I'm legally safe?
2) Westpac has always worked from debiting/crediting from my nominated account ( a Bankwest). I'm unfamiliar with how bell and CMC you open a bank account with them? Cash management account are they called?
I note that Bell Direct's registration indicates it's a non bank account and not covered by the bank deposit guarantee by the govt. Meanwhile CMC markets lists that they will open a CMC cash account in Bankwest for you?
Once again how are the legal ownerships work in these cases? Will the CMC bankwest account be legally in my name? Or in their name on my behalf? In cases of default will my money be safe, as next to question 1 about stock security, this would be most important?
I assume with Bell as it's not a bank account it references being secured to the balance sheet/debenture notes or something? So legally I'm screwed if anything happens?
3) If anyone has tried Westpac or has anythign to add regarding CMC vs bell or other brokerages that'd be great. To me I've only ever used the one broker so I have no idea how functionality can change that much.
On another note I hear bell now has live pricing (how does this differ to dynamic?) whereby it used to be pay to use. And CMC is $10/month.
Sorry for the extent and size of all these questions. I'm just hoping more experienced investors and those more versed in the legal side of things could offer some thoughts and opinions (legal facts would of course be preferred haha so I know it is 100% correct ).
That said, coming onto ASF I notice a heavy advertising presence of Interactive Brokers for $6 brokerage?! thoughts? each week i delay switching im paying $60 for buy and selling one stock with Westpac so I'd really hope not to complicate it with a 3rd contender?! Unless it's that great?
Thanks in advance for any help/opinions!