Brokers On Move
Illawarra Mercury
Thursday February 25, 1999
The discount stockbroking market would snare about 35 per cent of Australia's overall trading market within three years, Green Line Investor Services said yesterday.
Australia's discount brokers hold a comparatively small seven per cent of the overall trading market, compared to about 35 per cent in the United States and 25 per cent in Canada.
However, this was expected to grow significantly as investor discount brokers offered a fuller range of services and continued to undercut prices of the traditional investing houses, David Curtis, Green Line deputy managing director said in Sydney.
``If we just tracked the Canadian experience we would probably be looking at a market of about 25 to 35 per cent of the overall investing retail market being open to discount brokerage," Mr Curtis said.
Of that, 30 to 40 per cent of trades would be executed online within two to three years.
``That would be a very conservative estimate," he said.
Green Line, a discount stock broker formed when the Canadian-based company took over Pont Securities and Rivkin Croll Smith last year, expects to have 35 per cent of its trade executed electronically by the end of June.
Green Line now offered online trading in the United States, UK, Hong Kong and Canada and was looking at expanding into other markets.
Mr Curtis said it was on track to become the number-one discount broker and expected to snare three per cent of overall trading on the Australian stock exchange by the end of the year.
``We think that in three years we will be the pre-eminent online broker as well as the pre-eminent discount broker," he said.
``The Commonwealth (bank) will probably still be there as well but we will be there."
Mr Curtis said there was likely to be rationalisation in the discount broking market in the medium term.
``We believe the discount brokerage market is a business that needs a significant commitment and significant investment in it, both in technology as well as training and resources, and we don't think that in three years time you'll still see 80 brokers around.
``There will always continue to be room for full adviser brokers as long as they continue to demonstrate what value they are adding," Mr Curtis said.
``I think there are a lot of customers out there who are really questioning whether their advisers are really making them any money," he said.
© 1999 Illawarra Mercury