Cheaper trades as broking war hots up

NAB attempts to knock off E*Trade and Commsec

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published September 19, 2012 3:05 pm AEST

Competition amongst the big four banks is hotting up as NAB rolls out its own online share trading platform, nabtrade.

According to a report in the Fairfax media, National Australia Bank (ASX: NAB) will roll out nabtrade, its own customised system, to replace NAB OnLine Trading in October 2012. Brokerage rates will be lower, at $19.95 for online trades under $10,000, and will incorporate a new cash account, that allows live transfers of funds between eligible NAB accounts and the online cash account.

Until now, NAB had offered limited online trading through a third party trading platform, which was acquired by Commonwealth Bank of Australia (ASX: CBA) many years ago – prompting NAB to look for their own solution.

NAB faces an uphill battle against the incumbent market leaders including Australia and New Zealand Banking Group's (ASX: ANZ) E*Trade and Commonwealth's CommSec, which controls more than 50% of the online market.

Having another goliath competing in the online broking space is not good news for full service brokers, who are struggling with low trading volumes, and several have been forced to merge in recent times.

According to the nabtrade website, more research recommendations will be offered than any other online broker, and the site allows access to recommendations from its providers on over 1,500 listed Australian companies. There doesn't appear to be any mention of being able to trade international stocks though, something both E*Trade and Commsec offer, as well as a host of smaller online brokers.

NAB has also announced that it will be using a web version of IRESS's market data system, available for professional traders. IRESS Limited (ASX: IRE) always offers this through most online brokers nowadays.

It seems that IRESS is leveraging off its dominant desktop software, used by most Australian institutional and corporate market participants, and becoming the de facto trading software for retail traders. IRESS also announced recently that it is rolling out its XPLAN wealth management software to the entire NAB and MLC network of over 4,000 financial advisors.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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