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CommSec: Australia’s Best Big Four Online Broker?

CommSec is a subsidiary of Big Four bank, Commonwealth Bank of  Australia. It has a trading website founded in 1997; therefore, it comes with lots of experience in the field.

 

It can be challenging to find a favorable online stockbroking firm that satisfies your needs and provides access to the global market in addition to offering reasonable fees. 

 

In this post, you will find a comprehensive review covering everything about CommSec. This information applies to everyone, whether you’re new to trading in stocks or you are planning to supplement your repertoire by adding more trading instruments and charting tools.

What is CommSec?

Commonwealth securities (CommSec) is the top online stockbroking firm in Australia—founded in 1995 in Sydney and is operated and managed by the Commonwealth Bank of Australia. 

 

In most cases, CommSec users trade via its online site even though CommSec also offers a brokerage service and phone-in advice.

Who Needs CommSec?

CommSec is mainly designed for traders and investors who already know how share trading platforms function. However, new traders can also be accommodated on the share market as  CommSec is widely accessible to every kind of investor. 

 

When you open a CommSec trading account, you can choose to create several account types. 

 

One of the account types offered is the CommSec pocket, which targets those new to the stock market. Users can trade in seven different Exchange Traded Funds (EFTs), varying from the top 200 Australian firms to emerging markets in expanding global economies.

 

Another type of CommSec account is the CommSec one which targets active traders who spend above $3,000 in brokerage annually. This account comes with free access, trading tools, and additional research. You also get a committed customer service team.

 

There are two options when signing up—you can either decide to have a CommSec Commonwealth Direct Investment Account (CDIA) or link your investment directly to your non-CommBank bank account. 

A CDIA account has advantages over the other option—the main one being lower brokerage fees. 

Is CommSec safe?

CommSec is a division of one of Australia’s Big Four Banks (CommBank), which is highly regulated. Commonwealth Bank is among the largest ASX-listed companies in Australia—it uses the two-factor SMS authentication, client password protection, and fraud monitoring software which is exceptionally high level. 

Available Markets

CommSec users can trade in these markets:

 

  • Australian shares listed on the ASX
  • Options 
  • Fixed income securities 
  • Warrants
  • ASX listed Australian shares 
  • ETFs
  • International shares are found in over 25 leading global share markets like LSE, TSE, NASDAQ, and NYSE.

How Much Does It Cost?

Both CDIA account and share trading account are free to open, and they don’t have annual or monthly account-keeping fees.

 

The factors that determine the number of brokerage fees are the trade size and whether you have a CDIA account or not. Fees were as follows at the time of writing:

 

Brokerage CDIA Account Fees 

 

  • $10.00 for tradings up to and including $1,000
  • $19.95 for tradings over $1,000 and up to $10,000
  • $29.95 for tradings over $10,000 up to $25,000
  • 0.12% for tradings over $25,000

 

Brokerage via another bank account

 

  • $29.95 for tradings up to and including $9,999.99
  • 0.31% for tradings of $10,000 and above

 

Phone transactions are more pricey, with the lowest fee being $59.95. International share trading fees start at  $19.95 and differ according to the global exchange you’re trading in. You can incur inactivity fees if your International trading account stays dormant for a year. 

Commsec vs. Disruptors

Over the years, Australia has had “Robinhood moments” where several upcoming startups, mainly delivered as a mobile app, have introduced a commission-free model to the market. 

 

Platforms like Superhero, eToro and Stake are not owned by banks such as the Commonwealth bank, which has more than $ 1,000 billion in assets. Hence, these platforms have to be innovative to attract users.  

 

As much as these other platforms provide better offers, people prefer to use a well-known bank, Commonwealth bank, which is among Australia’s biggest banks—this bank has an online trading platform launched 25 years ago. 

 

These features guarantee the safety of your investment, even if Commonwealth bank is not at the forefront of innovation. 

 

The upcoming online trading platforms have cheaper fees and offer innovative features that may appeal to you and satisfy your trading mode. 

 

There is always a trade-off since they usually focus on a narrow part of the market like Australian or US stocks only, USD accounts,  ETFs or curated portfolios. 

 

On the other hand, you can access a variety of services in both overseas and local markets while using CommSec—therefore, you have a holistic outline of your trading position instead of an ecosystem of fragmented services. 

 

With this convenience, people are willing to pay more fees in CommSec than other cheaper platforms. 

 

Before use, narrow down your options to two or three with satisfactory features that’ll meet your trading needs. 

 

If you wish to trade, the next step is to compare their costs and choose the better option deciding whether you can compromise on a few features to cut costs. 

How to Open a Commsec Share Trading Account

Go to CommSec’s website and click on “Join Now” to open an account. You’ll have to fill in some information about the type of account you’d like, for instance, share trading and decide if you’ll use your existing bank account or a CDIA account.

 

Suppose you decide to use a CDIA account which is a less expensive option. 

 

In that case, you’ll have to fill in more information about the required account type, for example, company, joint, SMSF, trust or individual, fill in your contact details, job category and personal details, then finish an online ID check. 

 

After answering all the questions, your account will be up and running in five minutes.

Managing Your Account

Desktop

You Can access the Commonwealth Securities account via their online desktop site to complete trades—this is the best way to access their services. Making deposits, completing transactions and checking current investments is very simple when using the desktop platform.

Mobile App

The mobile app is also another option for trading. The CommSec mobile app is available on Android smartphones, iPhones, iPad and Apple Watch.

Pros and Cons

Pros

 

  • Safety and security are guaranteed since it’s owned by one of the Big Four Banks.
  • The sign-up process is speedy and straightforward.
  • It has a wide range of account types like companies, trusts, SMSFs and individuals.
  • The website and mobile app are easy to use.
  • A variety of trading options exist, including International shares, ETFs and Australian shares.
  • Opening and operating an account is free.
  • It accommodates both experienced and beginner traders. It offers company analysis and reports, market reports, webinars, and podcasts that provide information about share trading.

Cons

  • It has an inactivity fee for dormant international trading accounts (you should use your account at least once a year to avoid this).
  • More expensive brokerage fee if you don’t use a CDIA account.
  • Expensive brokerage fees compared to other startup online trading platforms.
  • Real-time data stream via WebIRESS is only available to CommSec One clients or if you pay a fee of $82.50 monthly or complete not less than eight trades monthly.
  • CommSec One and its benefits are exclusively available to active traders with a vast portfolio or spend a significant amount on brokerage.

Frequently Asked Questions

Can You Trade Crypto On CommSec?

No, you can’t—you’ll have to use platforms like eToro or CoinSpot.

Is CommSec Suitable For Beginners?

Yes. The website has a comprehensive Help Centre with several FAQs covering topics like “International trading” and “About the sharemarket”.

 

Additionally, there is an Education section with a specific area, “New to CommSec?”.

 

However, the least initial trading amount is $500, a reasonable standard “minimum marketable requirement”, which is avoided by some platforms that offer fractional shares. 

 

There is a cheaper option for beginners of investing in CommSec Pocket with as little as $50 in an ETF.

Does CommSec Have An App?

Yes, Commsec has the Commsec Pocket app, which is available for both Android and iPhone. With the app, you can easily access features that are available on the desktop version. 

CommSec Alternatives

If you are looking for other trading platforms, other alternatives might suit your needs: 

1. CMC Markets

CMC is an online trading platform that is suitable for both first-time users and experienced investors. The trading platform has won multiple awards, making them a leading financial trading platform in Australia.

 

Before investing in the platform, make sure you do due diligence to determine what they offer and the costs involved. Pay particular attention to what CMC markets have to offer for share trading. 

 

CMC Markets is based in the UK and is a global leader in forex trading, Contract for Difference platforms (CFD) and stockbroking. The company is LSE- listed and has been in existence for more than 30 years.

 

The company’s mobile app is well developed, making them popular among many users. The mobile app is available on both Apple and Android for those who want to trade on the move.

 

The company also has a good reputation for excellent customer service. CMC Markets have won over 50 awards in the last two years owing to their technology development, trading tools and overall customer satisfaction.

 

With CMC Markets, customers get market data that is up-to-date — some of which is usually free.

 

In CMC, you get to trade and develop your skills because there are a lot of resources that account holders can access. 

Research is easy and quick since their in-house analysts generate reports daily.

 

There are four platforms which are offered by CMC, which include:

 

  • Next Generation, which gives access to the complete product range.
  • MetaTrader 4, which is limited to CFD trading.
  • Standard Stockbroking gives you access to a free account to trade EFTs and global shares.
  • Pro Stockbroking is suitable for advanced traders and goes for $49 a month.

Pros & Cons

Pros
  • For Australian trading, the brokerage fees are low and competitive compared to other well-established brokers such as the broking platforms for significant banks and Bell Direct.
  • In Japanese, UK, Canadian and US markets, there are no brokerage fees for trading.
  • Various trading options range from indices, government debt, cryptocurrency, EFTs, commodities, options, shares, and forex products if you wish to trade.
  • The platform has won multiple awards for excellent customer service and its mobile and desktop apps.
  • A wide variety of services such as stop-loss, limit, take-profit, and market prices order types are available.
  • You are in the hands of experts as the company has over 30 years of brokering experience. 
Cons
  • Trading over the phone is relatively expensive — trading fees are around $60 on the mobile app.
  • Some global trading fees are high —  commission costs for trading outside the UK, US, Canada, and Japan can be higher than $ 59.95 or 0.59%.

2. Bell Direct

Bell Direct is an online platform that specialises in trading and is well known for its competitive fees, easy-to-manage portfolio, and informed trading features.

 

This platform is suitable for newcomers who are just getting to know the share trading world and experienced investors who watch share trading. 

 

With a basic account, customers can access many helpful features free of any monthly costs. However, each trading transaction attracts a low brokerage fee.

 

While on this platform, users with accounts can trade in a range of investment products that are ASX-listed. 

 

Opening and maintaining a basic account for trading is free. However, some charges have to be paid for trading transactions — the costs usually reduce if you frequently trade.

 

To access additional features, seasoned traders can choose to pay a monthly fee. 

 

The online share trading platform offers many tools for seasoned investors such as margin lending (usually secured against your portfolio to allow you to borrow to make further investments), live streaming using WebIRESS and advanced charting.

 

Trusts, Self-Managed Super Funds (SMSFs) and companies as clients are accepted. An additional SMSF administration and compliance services are also offered — fees are payable on an annual basis.

 

If you are new to investing, don’t worry: Bell Direct has still got you covered with competitive fees, easy tax reporting, broker research from pros and daily trading ideas.

Pros and Cons

Pros
  • Brokerage fees are competitive and reduce the more frequently you trade.
  • The free basic account offers features that are suitable for seasoned and beginner investors.
  • Once you’ve placed your order, one-second trades are guaranteed.
  • The platform is mobile friendly and is accessible on smartphones.
  • The platform is available to individuals and trusts, joint accounts, companies, and SMSFs.
Cons
  • It is limited to ASX, and therefore the only investment products available are Australian.
  • Orders placed over the phone are expensive — the cost can be as high as $60 or 0.2%.
  • Funds that are managed are expensive — they cost $0.1% or $30 online and 0.2% or $60 on the phone.

3. Pearler

The platform was established in 2018 by three friends from Sydney. The platform offers a great alternative to bulky brokerage platforms and micro-investments apps which can be expensive and confusing. 

 

The company’s mission is to “establish a one-stop-shop for personal finance” with “savings, investments, loans from multiple providers, all in one place”. At the moment, their main focus is to help people achieve their long-term financial goals.

 

One cannot read the company’s mission without Warren Buffet, a renowned value investor, coming to mind. Warren Buffet started small but is among the top 10 wealthiest people globally, as per Forbes magazine. 

 

Value investors usually purchase for the long haul (when there are low prices) and hold onto the shares without falling prey to fancies and whims that characterise fluctuations in market prices.

 

Pearler is ideal for Australians looking for an easy way to invest in shares. The platform can accommodate both new and seasoned investors. 

 

If you need help to invest shares “the right way”, Pearler is the platform. With the platform, you also get to develop a long-term diversified portfolio. 

 

If you are prone to get in and out of trades within a short time, the app might not be suitable for you.

 

Pearler offers distinguishing features not provided by other well-established investment platforms such as NABtrade, CMC Markets, CommSec, Selfwealth and CommSec Pocket.

 

  • The platform has an auto-invest feature in which once you invest, you are freed from the constant worry of your share portfolio as it is put in Autopilot.

    The first step is to choose the frequency, amount, and the particular shares you want to invest in.

    With the latest version, you get to choose from two options: you can invest immediately after making a deposit or allow your deposit to grow interest and then invest it after it attains a particular value.

    The portfolio looks after itself once you set your strategy for auto investing. Pearler offers three auto investment strategies: Equal invest, Rebalance portfolio and Lowest share.

  • The auto-deposit feature can work through repeated direct debit to add to your cash account or one-off.
  • The platform has a Goal tracking feature that allows you to set an investment goal and track your progress.
  • Their shareable portfolios and profiles are the same as those of eToro’s social community. There are many notable “Finfluencers”. If you’d like to become a “Finfluencer”, make your portfolio public.
  • The platform has template portfolios containing information on Life insurance companies (LICs ), ETFs commonly invested in, and popular shares among the Pearler community.

    The ready-made templates come with themes such as the Financial Independence Retire Early (FIRE) portfolio or sustainability-oriented ones. You can use the template as it is, or you can change it to suit your needs.

  • Tax reporting has been made easier as Pearler has integrated with Sharesight, a reporting tool.

Pros and Cons

Pros
  • Pearler has CHESS sponsorship, ASIC licence and cash held with big banks, making it safe and secure.
  • There are no hidden charges or starting maintenance and inactivity fees.
  • There is no limit on investment order size.
  • The flat brokerage per transaction is competitive.
  • The main focus is on long term investment which distinguishes Pearler from other platforms.
  • The platform can accommodate seasoned investors and beginners.
  • You can build your portfolio using either auto-invest or manual modes.
  • You can watch and learn from Finfluencer portfolios.
  • You can have individual accounts or even both.
  • Ease in reporting taxes as the platform is integrated with Sharesight. 

Cons

  • It is restricted to Australian shares and ETFs, although there are plans to include more markets.
  • It has no mobile app, although the website is easy to use.
  • You do not get help when deciding what to invest in as there are no research reports.
  • There are no trust or SMSF accounts, although plans are underway to put them in place.

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