Buying and selling shares online remains popular. Shares in New Zealand’s publicly listed companies are traded on the New Zealand Stock Exchange, the NZX. But what do investors need to consider when choosing an online share trading platform? To a large extent, the importance of various features will differ depending on your investor profile, in terms of how much and how often you trade.
What to Look for in an Online Share Trading Platform. In this article we cover:
- What type of investor are you?
- What to look for in an online share trading platform
- How to set up an investment account
- What online share trading apps are on offer in NZ?
- Investing in KiwiSaver
Who are you?
|Average number of transactions||Average transaction value||Securities traded||Requirements|
|Beginner Investor||4-5/year||$20-$200||Shares||Easy-to-use App|
|The Beginner Investor is using apps such as Stake and Sharesies to buy and sell shares occasionally for fun. They rely on social media for tips on hot stocks and have no real investment plan.|
|The Casual Investor buys and sells shares occasionally, using a long-term strategy to review their investment portfolio.|
|Active Investor||40/year||$10,000-15,000||Shares, managed funds||None|
|The Active Investor buys and sells shares and derivatives more frequently than the Casual Investor, using the latest market information, data analysis and reports to determine portfolio holding.|
|Trader||360/year||$15,000+||Shares, derivatives||Dynamic trading platform|
|The Trader buys and sells shares very frequently, and the latest market information is used to determine their portfolio holding.|
What should you look for in an online share trading platform?
An easy-to-use app is the main requirement for the beginner investor. They don’t require a high level of support or educational material – instead they choose their stocks on what they read on social media. While their investments are primarily made for fun, they still need to pay close attention to the fees they are being charged. For while most of the apps they use charge no up-front costs, transaction fees and currency conversion charges can soon add up.
The comprehensiveness of investment tools isn’t always the most important factor in selecting the best broker for the Casual Investor. Casual Investors typically require a high level of client services and support to be available, as well as excellent educational material and a trading platform that is easy to use. There is certainly a great need for easy-to-use and easy-to-understand education around the share market. Cost also makes a big difference for Casual Investors. This is because typically fees are set at a higher percentage of the investment amount compared to investors trading in higher amounts or more frequently.
The comprehensiveness of research tools is an important factor in selecting the best broker for the Active Investor. Active Investors may need access to detailed company and market information and may need margin loan availability. They will likely require a dynamic trading platform, meaning you have a live data stream that updates without the need to hit the ‘refresh’ button. Due to their higher trading frequency, cost is also important.
Cost is an important factor for the Trader due to their high trading frequency. The availability of trading in the derivatives market is also an important option for Traders. A dynamic trading platform and access to superior charting tools is often a must for Traders.
How to set up an investment account
You can set up an investment account through any of the providers websites or apps. Be sure to look for the other features before signing up.
- Account services
- Reporting methods for dividends and interest earned, year-to-date profit/loss statements, and tax reporting tools
- Client services and support, availability of after-hours helpline, and platform training for the customer online or over the phone
- Margin loans available
- Company and market information available
- Research tools, alerts, and other technical trading information available
- Basic and advanced charting available
- Educational and technical help available
- Online security provided to a high level
- Flexibility of or restrictions on settlement of account
- Trading platform functionality, dynamic data stream
- Accessibility of the channel via multiple methods
- Fees charged
KiwiSaver: investing in all Kiwis
If you’ve KiwiSaver, you’re already a seasoned investor. KiwiSaver is a great way to invest in your future, from a first home through to retirement. And whatever stage of life you’re at, it’s something that you should actively manage to ensure you’re earning the best returns and value for money. So when was the last time you checked your KiwiSaver balance, or compared returns and fees? It’s as easy as clicking onto Canstar’s KiwiSaver comparison tables!
For more information about Canstar’s expert KiwiSaver ratings and our 2020 KiwiSaver Scheme Provider Award click this link. Or to compare KiwiSaver providers, click on the button below.
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