How To Open A Brokerage Account in Australia

Brokerage Account in Australia
How To Open A Brokerage Account in Australia

Opening a brokerage account is necessary for trading in Australian exchange. However, it’s important to decide which account you’ll need depending upon your trade and stock types. 

Also, you must know about the features of a brokerage account you’ll need to achieve your investment goals in the Australian stock market. Now let’s move on to explore different brokerage accounts available and how to open yours for you! 

What Is a Brokerage Account?

In the stock exchange market, a brokerage account is an account used to purchase and hold your investments. You can hold stocks, ETFs, and prize bonds in these types of accounts. 

Here are the most popular brokerage accounts in Australian market; 

Full Service Brokerage Account

If you open a full service brokerage account, the relevant brokerage firm purchases and sells investing assets for you. The firm will also look after your securities available in the full service account. 

Individual Brokerage Account

Individual brokerage accounts are also in different brokerage firms but here you make your own decisions on buying and selling stocks. This account type is also called a shared trading account in Australia. 

Brokerage Account Fees & Commissions

Most of the Australian brokerage accounts in the Australian exchange market have no commission. But it never means they don’t deduct any fee or charges. So, it’s important to learn about all the fees and charges for a particular account. 

For example, Fidelity is one of the most common online brokerages operating in the US, Australia, and some other countries. It deducts about US .65 for every contract and one dollar for trading a single bond. 

Like Fidelity, other accounts also have some fees and charges and it’s important to understand them. Some brokerage firms also offer incentives when you open accounts in their firm. So, always explore all the benefits and drawbacks of opening a brokerage account in any firm before making a final decision. 

Read more: Beginner’s Guide to Investing in the Australian Stock Market

Brokerage Account vs. Robo-Advisor

Most of the starter traders don’t know the difference between a brokerage account and a Robo advisor. Perhaps, a Robo advisor may be better fit for some investors than a brokerage account. 

As the name suggests, a Robo advisor not only opens up an account for your selling and purchasing but also helps you build your portfolio. They charge annual fees for helping you build and manage your portfolio in the stock exchange market. 

Before finally opening up your account, Robo advisor asks you different questions for a deep insight into your investing goals. After analyzing your time horizon and risk tolerance capability, they suggest you the best low price ETFs for your portfolio. 

If you are new to the Australian stock market, opening up a Robo advisor account will be better option. They will guide you on each step and will charge about 0.25% of your portfolio value as their fee. 

Brokerage Account Features

When opening up a brokerage account, you should explore different features features. Doing this will help you finalize whether that particular account suits you well or not. Here are the most important features to look for when choosing a brokerage account; 

Brokerage Account’s Technology

Always focus on an easy access to your brokerage account. So, look for the account’s website, its application, and interface. It will give you an idea about how the firm works. 

Educational Source

Focus on easy educational source because you’ll need occasional guidance from them. Look for informational articles, assistance methods, webinars, and tutorials that the firm offers about opening and operating your account. 

Research Tools 

You may need some research tools to analyze the market on your own. Most of the brokerage firms offer rating methods and may also offer third party research for a detailed analysis of the market. Analyze this feature when choosing account for you. 

Familiarity Complexity

Always go for a brokerage firm that is easy to understand and guide you on investment and ROI. This way, operating your account will be easy and seamless. 

Proprietary Funds

Most of the trading firms offer low or no fee funds for investment. These proprietorship options let you make profit with a little investment. So, try to choose a firm with this facility. 

Physical Branch Availability

If you’re not much satisfied with the online guidance and support, you may need a face to face meeting with your brokerage firm. So, look for a firm that has a branch in your locality. 

How to Apply for a Brokerage Account

In the modern technical age, opening your brokerage account is super easy and quick. If you don’t face any technical operational error, you can finish setting up your account in 10 minutes. Most of the firms demand the following information to open an account; 

  • Tax file number (TFN)
  • Your phone number, home address, and other personal informational
  • If you’re employed, they may demand your employer’s personal information
  • Your net worth and income

Depending upon your investment, you’ll join a different membership level in that particular firm. Moreover, you may have to answer particular questions to verify that the accounts belong to you. 

How to Fund Your Brokerage Account

Keep in mind that funding your brokerage account is not inevitable at the time of account opening. Rather you can add funds later. The brokerage firms offer the following options for adding funds; 

  • By linking your saving and brokerage account
  • By wiring funds to your brokerage account
  • By transferring funds from one brokerage account to another

After funding your brokerage account, you can choose different investment plans based on your time horizon and budget. You can utilize the educational tools of your relevant firm to finalize your investment. Moreover, a financial advisor can also assist you at this stage. 

FAQs of How To Open A Brokerage Account in Australia

Is a trading account a type of brokerage account?

Yes, a share trading account in Australia is a type of brokerage account. You open a trading account through a broker and then use it to sell and purchase your shares. Mostly, it happens in ASX market that you use your trading account for share purchasing and selling. 

What are the brokerage trading hours?

In Australian stock exchange market, the normal trading hours are 10 am to 4 pm. However, the trading hours may differ depending upon the market you’re trading in. So, always explore the operating time period of your relevant market for an optimal trading experience.

Is stock trading worth it?

Yes, stock trading is worthy because the ROI on equities ranges from 3% to 6% from the last 120 years. This ROI is far more than other investments like bonds purchasing and selling. So, stock trading can be a good step towards building assets for your future.

Conclusion

Opening a brokerage account in Australia is quite easy and super fast. However, it’s important to explore different brokerage account options and the firm for opening your account. Certain features can help you decide which firm suits your well according to your investment and time plan. So, always take your time to look for the features of each available options for opening a brokerage account. This way, you can land the best choice for your trading journey! 

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