Important considerations


An investment in shares can start from as little as $500 plus brokerage costs. Generally, people start with an investment of $2000 due to the cost of transaction.

Setting your investment goals

  • What do you want to achieve from your investments?
  • Do you want a return in the form of income or capital growth?
  • Are you prepared to risk some of your investment capital for the opportunity to make higher returns?
  • Do you need additional security?

Your age and time frame for investing may affect your decisions. A full service broker can help assess your current financial situation and set your financial goals.

Choosing who to use to buy and sell shares

If you are a beginner, you may value the advice from a full service broker. If you are interested in low-cost trading and are confident in your sharemarket knowledge you may prefer a non-advisory stockbroker. You should also assess the services that individual broking firms offer.

Setting up a trading account

Many brokers require you to set up a client account before you can start trading. This can take a week but can usually be done in 24 hours. A cash management account with a financial institution may also be required to facilitate funds transfer for payment and sale of your shares.

Providing personal information

When a broker provides advice they are obligated under the Corporations Law to enquire about your needs and current financial situation.

You don’t have to supply this information however they can only make specific recommendations with this knowledge. Non-advisory brokers do not require this information as they do not give advice.

Questions to ask your broker

What type of services do you provide?
A full service broker may offer advice, research, access to floats, access to their internet site, and financial planning. A non-advisory broker may offer access to information, low-cost trading, and straight through order entry.

How do you charge for your services?
Brokers typically charge a flat fee or a percent of the value of the trade for higher amounts. Take into account any additional services they offer.

Do you provide a regular newsletter or information on any new opportunities?
Most brokers offer emailed or mailed updates on opportunities, regular newsletters with research, and access to the firm's website.

What information can I obtain on your website?
Some brokers offer substantial market information on their websites. There may be a cost for clients to use this service.

Do you conduct client seminars?
Brokers will sometimes provide seminars and classes on aspects of investing for their clients.

Are you or your firm associated with any of the companies whose investment products are recommended by you?
The broker should always let you know of any conflict of interest or if any association exists.

What research facilities does the firm make use of?
This can be either the use of an internal research department, or subscriptions to research organisations. Some non-advisory firms will not offer research.

How might you review my investment plan and how regularly would you do that? (full service brokers only)
You could expect a quarterly review however this depends on how actively you trade. This could involve re-weighting your portfolio and reviewing the overall performance of your shares.

Do I have to set up an account with you before I can trade? How long will this take?
This question is particularly relevant if you want to be able to trade shortly after choosing your broker.

Questions regarding international trading

Which markets and which financial products on those markets can I access?
You may need (or prefer) to use different service providers for different markets.

What other parties are involved in providing the service?
Are orders placed through a related stockbroking firm in the overseas market or is a third party involved? Check the licensing and regulation of each party and any other protection available to you.

How do I pay? Do I need to set up a cash account?
If you prefer to deal in Australian dollars you should ask when and how currency conversion takes place. In addition to the timing, check the typical Buy/Sell spreads and whether there are any additional fees for conversion. If a cash account needs to be set up, check whether interest is paid and any other features available, including the reporting of foreign currency interest for Australian tax purposes.

How and when can I place orders?
The ability to trade online may mean you can place orders while overseas markets are open. Alternatively, the stockbroker may operate a night desk. Some brokers take your orders during the Australian Business day and queue them to be entered into the overseas market when it opens. Ask whether your stockbroker will resubmit any unexpected orders.

Where are my financial products held and how are they registered?
This determines how easily you can sell financial products or borrow against them, participation in corporate actions, reporting and access to your account information.

Is there a minimum transaction amount?
This affects your ability to diversify your holdings and take advantage of different opportunities.

What is the brokerage?
Just as levels of service and pricing differ between brokers for domestic trading, so too will the level of service and pricing of trading international financial products. 

Are there any custody fees or other fees and charges?
This can vary per market and per exchange.

What research do you provide?
Various sources of research information are available.

Do you provide access to any other investments (including unlisted managed funds)?
This may or may not be of interest to you.