Blog | Investing tips

Top brokers Aussies use to invest in stocks and ETFs

by Stephanie Stefanovic, Content Manager, Sharesight | Sep 30th 2022

With the ever-growing number of stockbrokers available to Australian investors, many investors are left wondering which is the best broker to suit their needs. Priorities differ depending on the individual investor; for example, are they a frequent trader or more of a long-term investor? And do they prefer stocks or ETFs? With some of these questions in mind, we take a look at the most popular brokers among Sharesight users in FY21/22.

Australia-Top brokers for stocks and ETFs (1)

As can be seen from the chart below, the most popular Australian broker (in terms of individual investors) was CMC Markets, followed by CommSec, Selfwealth and Pearler.

Top Australian broker by user numbers

While CommSec has the largest market share in terms of overall Australian investor numbers, CMC Markets managed to edge ahead among Sharesight’s Australian user base. This is likely due to CMC’s connection to the Sharesight API, which allows Sharesight users to directly link their CMC brokerage account to Sharesight. CMC’s support for a wide range of global markets – including $0 brokerage fees for international trades – is likely another reason why CMC was the most popular choice for Australian investors.

CommSec was also a clear favourite for Australian investors over the period, which can be likely attributed to CommSec’s long history as a leading Australian broker. It’s also easy for Australian investors to get their CommSec trades into Sharesight, with support for CommSec CSV files (spreadsheets) as well as the ability to automatically forward trade confirmation emails.

One interesting insight to note is the presence of auto-investing broker Pearler in this list. The platform is built with long-term investors in mind, much like Sharesight, which is likely why Pearler is one of the most popular brokers among Australian investors using Sharesight. Pearler is also connected to the Sharesight API, making it easy for investors to sync their trades to Sharesight.

When we look at the data in terms of the most popular broker by number of trades, CommSec is the clear winner, followed by CMC.

Top Australian brokers for frequent traders

This is an interesting result, as (during the period of the dataset) CommSec has consistently higher brokerage fees than CMC across a range of trade types. One possible explanation for CommSec as the most popular broker among frequent traders is that CommSec offers an expansive range of research tools and free live pricing, plus access to key global markets including the NYSE, NASDAQ, LSE and TSE, which would appeal to frequent traders.

With comparatively lower brokerage fees for the ASX, $0 international trades and a range of technical analysis tools, it is also clear why CMC Markets is popular with frequent traders.

Third in the list of most popular brokers by trade numbers, Selfwealth likely appeals to frequent traders due to its relatively low-cost flat trading fee, plus access to US and Hong Kong markets.

Top Australian brokers for ETF investors

In terms of the most popular Australian brokers among ETF investors, Selfwealth comes out on top, followed by CommSec and CMC Markets.

Top Australian brokers for ETFs

One reason why Selfwealth may be the frontrunner in this case is the broker’s offer for free brokerage on ASX ETFs, a campaign which ran for two months during FY21/22. According to Selfwealth, ETFs are one of the most sought-after assets among its customers, with ETFs comprising up to 40% of the value of all holdings across the platform.

In general, ETFs have been steadily growing in popularity as a choice for Australian investors over the past few years, with ASX ETFs valued at $113.5 billion as of June 2021. And with CommSec and CMC Markets topping the list of Australian investors’ most popular brokers overall, it also makes sense that these brokers are some of the top brokers for Australian ETF investors.

In terms of Australian investors’ most-traded ETFs of FY21/22, Vanguard’s Australian Shares Index ETF (ASX: VAS) was the clear leader, followed by Vanguard’s MSCI Index International Shares ETF (ASX: VGS) and Betashares’ NASDAQ 100 ETF (ASX: NDQ).

Top ETFs from FY21 22

It’s easy to see why VAS is a popular choice for Australian investors, as this ETF tracks the ASX 200, making it a good choice for investors looking to diversify and balance their portfolio while still focusing on Australian shares.

VGS also tends to be a popular ETF for Australian investors looking to diversify their portfolio, as it provides exposure to many of the world’s biggest companies listed in developed countries, and is exposed to fluctuating values of foreign currencies.

At the same time, NDQ tends to be popular with investors seeking exposure to the US tech industry, as this ETF tracks the NASDAQ 100, which includes a diverse range of tech stocks, including some of the world’s largest companies by market capitalisation.

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