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0.General, 1.Market Observations, 2.share trading

28 July 2012 (AFR excl) – Why Australians are abandoning stockbrokers

[COMMENT: It is widely understood that stock brokers are suffering in the current trend of share market investors to shun the markets and look for safer investments that won’t lose their money. The article below includes reflections, comments and research. The printed article included a great bar chart which is not published online, so I have scanned it and included it below.]

(28 July 2012, AFR, Joyce Moullakis)

Why Australians are abandoning stockbrokers

‘Private client stockbroking firms are failing to satisfy affluent and wealthy customers as equity market trading volumes languish and top end clients increasingly look to online brokers.’

‘More than 40 per cent of affluent and wealthy individuals prefer to use an online broker, according to a survey by financial services research firm CoreData. The survey of almost 2000 individuals also found that those using a full-service stockbroker gave the firm only an average score.’   <snipped…>

‘CoreData’s survey also identified a broker’s experience, trust, communications, investment performance and value for money as the top five factors for satisfaction, while fees and charges and access to IPOs were in the bottom five.’

‘ “There is an alarming amount of distrust towards stockbrokers and the more they continue to focus on returns exclusively that trust gap will widen,” CoreData director Guy Ogier said. “Australian full-service brokers are in serious danger of missing the opportunity . . . Brokers must focus their efforts on client satisfaction.” ‘

‘The survey also suggests there isn’t a dominant player among local private client stockbroking firms.’

‘Excluding Commonwealth Bank, which aggregates its retail and institutional brokerage, Sydney-based BBY accounts for 1.7 per cent of total volumes this year across the Australian Securities Exchange and Chi-X, while Macquarie Private Wealth sits at 0.9 per cent. Trailing the pack are Wilson HTM and Shaw Stockbroking with about 0.2 per cent each.’

‘The head of Macquarie Private Wealth, Eric Schimpf, said internal research of private clients showed “thought provoking ideas” were highly valued.’

‘CoreData defines affluent individuals as those with investable assets of $50,000 to $350,000, excluding their main residence and wealthy individuals as those with $1 million to $3 million in investable assets.’

Broker satisfaction (source: Core Data)

Broker satisfaction (source: Core Data)

Read the full article at (might need AFR login access)


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