Advisers may benefit from the ASX's first new online broker since 2007, following the launch of OpenMarkets.
An independently-owned stockbroker specialising in low-cost online trading solutions, OpenMarkets is a full market participant of the Australian Securities Exchange, National Stock Exchange of Australia, and SIM VSE.
The launch of OpenMarkets comes at a time when smaller full service brokers are finding it hard to survive. They have been struggling with more stringent compliance requirements from ASIC and ASX, coupled with the impacts of the GFC.
More importantly, the company says, advisers have had to seek cheaper options for their clients thanks to increased pressure from FOFA.
Chief Operating Officer Andrea Marani says, “Our focus on execution will make us extremely attractive to financial service providers wanting to offer their clients an online trading service that does not try to sell financial products that are in direct competition with their services.”
OpenMarkets’ retail services include a ‘no-frills’ web trading platform together with an advanced trading platform. OpenMarkets’ transaction cost is $13.95 or 0.07% per transaction which it says is lower and simpler than the fee schedules of its bank competitors.
“Our focus is very much on providing a low cost, personalised, online, independent broking service,” says Marani.
Its resources and infrastructure are provided through a partnership with Paritech, a leading provider of front and middle office software trading technologies to the finance industry. Through this partnership OpenMarkets also has access to an initial client base of high net worth investors through subsidiary company, Paritrade.
Commenting on the launch of the business, ASX general manager of Trading Services, David Raper, said “ASX is pleased to welcome OpenMarkets as a new market participant. The market structure and the needs of users have undergone significant change in recent years and ASX is pleased that OpenMarkets has identified the competitive advantage of hosting its market data and trading infrastructure in the ASX Australian Liquidity Centre.”