2020 was the year zero-commission share trading took off in Australia. These are the 6 platforms letting you invest brokerage-free.

Zero-commission share trading platforms are suddenly competing for the Australian market. (Myrna M. Suarez, FilmMagic)
  • While local share trading platform Stake has been letting Australians invest commission-free for years, there’s suddenly a whole lot of competition.
  • In the space of a few months, some brokers have slashed commission on select investments while others have just launched in Australia.
  • This is a quick rundown of the various players, what they offer, and just as importantly, what they charge.
  • Visit Business Insider Australia’s homepage for more stories.

Zero-brokerage trading platforms aren’t new, but it’s taken this long for a few to really crack the Australian market.

In 2020, Australian investors have finally been given plenty of options for making their money work for them on the sharemarket, without having to pay upwards of $20 a go.

Of course, there are still some catches, with some offering it only on select investments or charging other kinds of fees. For that reason, it’s up to you to weigh up what the best option may be for your investment style.

Nonetheless, it’s good to see a more competitive field begin to open up in Australia.

For those looking for a better solution, here’s a quick wrap up of the brokers offering commission-free trading.

Just remember, you’re not the Wolf of Wall Street.

eToro has commission-free trading on U.S. stocks

For Australians keen to play on Wall Street, eToro has you covered.

Cutting its commission to zilch back in April, the trading platform lets Australians buy and sell U.S.-listed companies and — as long as it’s not a short or leveraged buy — won’t charge you a cent to do so.

It also gives the option for Australians to buy fractional shares, allowing them to drip feed their savings into the share market rather than having to mortgage the house for a slice of Amazon.

Uniquely it also allows users to ‘copy’ the trades of more experienced investors, who make their activity public for all to see.

eToro also allows Australians to trade forex, indicies, commodities, cryptocurrency and CFDs,

Minimum purchases are $US50 and other charges are applicable, such as withdrawal fees upwards of $US5, foreign exchange spreads, and, curiously, a $US10 inactivity fees if you don’t log in for 12 months.

There’s also no option to buy shares outside of the U.S., but given the size of the U.S. market and the level of local interest in companies like Tesla, Apple, Facebook, and even U.S.-listed Atlassian, that may not be an issue for everyone.

Stake doesn’t charge brokerage on U.S. shares and ETFs

Unlike eToro, however, Stake is actually an Australian platform, started by Matthew Leibowitz and Dan Silver.

It’s been letting Australians invest in some 3,500 U.S. companies and exchange traded funds (ETFs) since 2017, but has seen appetite soar during the pandemic as amateur traders dive into the market, attracting more than 100,000 local users.

Its interface appears a bit more geared more towards thematic investors, with a drop-down menu allowing users to select options like “today I want to make money when markets fall”, “short the oil market”, or get exposure to gold or the volatility expectation index (VIX), for example.

Like others, it’s a U.S.-only trading platform, charges no brokerage when buying or selling, and offers fractional investing.

Instead of commissions, investors pay a 0.7% foreign exchange fee when converting money to and from US dollars, as well as a $5 establishment fee when they join. If you want to buy directly with a debit or credit card meanwhile, you’ll pay 2% on top of what you transfer. Other fees may also apply.

Superhero charges $0 brokerage on ASX-listed ETFs

Of course, not all the action is happening overseas.

Launching last month, Superhero is one of the latest challengers undercutting the competition.

While you’ll still pay a flat $5 on Australian stocks, you can buy and sell ASX-listed ETFs for free.

Endorsed by Warren Buffett and a frequently used tool among passive investors, there’s clearly broad appeal for index ETFs and others, which can give a portfolio quick and easy exposure to a range of different sectors and companies.

Superhero users can also elect to pay a $9 a month subscription fee for a premium ‘Live account’, or continue with a free basic account.

While that’s pretty much it, there are a few other charges you might encounter. A full list can be found here.

IG won’t charge commission on a host of global shares

The success of Stake, the launch of Superhero, and the arrival of eToro in Australia haven’t gone unnoticed by incumbents.

This year IG cuts its brokerage on U.S. shares to zero in response. In addition, you can trade UK, German and Irish stocks as well for free although, like Stake, you’ll still be charged a 0.7% FX fee, and potentially others.

For Australian trading, you’ll be paying a $5 or $8 commission, and potentially be up for a $50 fee if you make less than three trades a quarter.

Vanguard ETFs are free with Vanguard’s new platform

When it rains it pours. Similarly, in April this year, investment giant Vanguard cut it brokerage on its extensive range of ETFs as well as managed funds when Australians buy directly.

Vanguard ‘Personal Investor’ accounts can also trade Australian shares but will be charged $19.95 or 0.15%, whichever is greater.

Likely of greater concern is an annual account fee charged at 0.2% of your portfolio. While it is capped at $600, it’s a relatively big fee to pay considering most brokers don’t charge any.

Due to the limit of Australian-listed investments, there are no FX fees to worry about, while trades are limited to a minimum of $500. Other fees can be found here.

Interestingly, they’re unable to buy other company’s ETFs, like rivals Betashares or iShares for example.

CMC Markets doesn’t charge a cent in commission on many global shares

In the same vein as IG, CMC Markets also offers commission-free trading for U.S., UK, Canadian and Japan equities.

There’s also no inactivity fee to worry about, although most Australian trades still incur a $11 or 0.10% commission, whichever is greater.

For those looking even further afield, you’re facing a $59.95 or 0.59% brokerage fee.

A full list of other fees can be found here.

Disclaimer: This article contains general information only and is not intended to be used as personal advice.