While costs have gone down for Australian investors, those waiting for commission-free trading on the ASX (as exists overseas) may be left disappointed.

In the past couple of years brokerage-free trading options have emerged for US markets, including some that Australian investors looking to the US markets can utilise such as Stake, Robinhood and eToro.


Commission-free trading on the ASX?

But commission-free trading isn’t likely to come to the ASX and this owes to the cost structures of the market.

It is possible in the US because some exchanges go so far as to pay investors to trade because they want that volume – a practice known as “payment for order flow”.

Superhero is one other broker offering $0 brokerage for US shares but it charges $5 a pop for ASX shares and ETFs.

John Winters, the co-founder of Superhero, tells Stockhead this is unlikely to chhange.

“I think in Australia and many other countries there are transaction costs that go along with trading,” he said.

“Due to the competitive nature of the market, other forces, different structures, payment for on-flow which we’ve seen to be prominent out of the US. There are just different ways the market is structured.

“There is a cost to trade and that’s why brokerage hasn’t gone to zero and is unlikely to go to zero unless people are offering a loss-making service.”


Superhero raises $25m to enter New Zealand and crypto

Stockhead spoke with Winters as his company unveiled a $25 million capital raising.

Initiatives Superhero hopes to fund with this new capital include entering the New Zealand market – offering NZX as well as ASX – and Wall St trading to Kiwis.

“We see that [New Zealand] as an interesting market because the pricing model particularly in NZ hasn’t really moved significantly. It’s quite a high cost market for investors, so taking a simpler size to pricing model along with the platform we built – we see this as big opportunity,” Winters said.

Superhero also wants to enter the crypto space and hope it will help shy investors take the plunge into the space.

“Crypto is a key buzzword in financial circles and more broadly, but a lot of people are still somewhat skeptical about and there’s this psychological barrier to entry because it’s new and a world people aren’t familiar with,” Winters said.

“Bringing it into the world of regular investing brings that element of trust along with the trust we built in our brand.”

Winters says while the wave of digitisation in financial markets was set to happen eventually, COVID-19 accelerated it.

“There has been huge rise but generational shift,” he said. “We see it’s a new generation of income earners who are looking to build their wealth, who feel locked out of property because of runaway prices and how to keep up.

“And they are turning to the world of investments which have typically been locked out of or reserved for Boomers and the wealthy.”