CMC Markets: Investor trends

cmc-award-squareOnline share trading seems to be back in favour: investor numbers are up over the past twelve months and technology makes it increasingly easy for investors to place a trade. CMC Markets has once again topped CANSTAR′s research into online share trading platforms, taking the 2014 overall award for Best Value Australia in the online share trading world for the fourth year in a row!

CANSTAR spoke with Head of CMC Markets Stockbroking, Andrew Rogers, to get his views on the changing habits and preferences of online traders in Australia.

Q: With the share market posting healthy returns over the past 12 months, have you noticed an increase in frequency and volume of trades recently?

Absolutely, we are seeing trade frequency increasing year on year amongst our online investors.  Looking at the Top 10 Most Actively Traded stocks by value between the periods Apr 12 – Apr 13 and Apr 13 – Apr 14 we′ve actually seen a 22% increase in the numbers of orders.

Not surprisingly, positive investor returns are an important factor that drives trade frequency.  Interestingly, when we looked more closely at trade frequency amongst the top ten stocks traded it was clear it wasn′t just a case of more clients buying or selling these stocks.  There were clear exit and re-entry strategies in the same stocks by the same clients over the period – reflecting the current trend towards more active investment strategies.

 

Q: The way in which investors trade is changing in line with technological advancements. What trends are you seeing in that area?

As a global retail-trading firm we get powerful insight into the tools and features that investors and traders demand from their trading platform/provider. Our development is done in-house by a dedicated team of software engineers, ensuring the platform evolves ahead of the market with fresh content, research tools, trading tips, tax & portfolio reporting and real-time connectivity to numerous banks (margin lenders and CMA providers) and third parties.

The adoption of mobile devices for both trading and research is incredible. In the month of March our clients (globally) placed over 1 million trades via mobile devices (Android, iPhone, iPad) – a clear testament to the advances made in mobile technology. With the continued advancement of mobile hardware, coupled with a client demand for a more sophisticated user experience. We are seeing lots of development on HTML5, which allows one platform experience across multiple devices.

Whilst I can′t say too much about what we are working on, we believe HTML5 will allow us to further push the boundaries of what′s possible in retail trading.  Indeed, I can confirm a number of projects are well underway to solidify our position as an innovator and leader within the industry and more importantly – give our clients the tools & features they need to succeed in generating wealth from investing.

 

Q: From your experience, what are some of the most important add-on features that investors appreciate?

As platform provider and broker we see it as our responsibility to provide the tools and features to simplify investing.  Client feedback and industry surveys have given us an indication as to the most sought after features:

I.            Stock Filters & Screening tools (based on fundamentals, risk level, relative performance, sentiment, price potential)

Investors are increasingly time poor but faced with an over-load of information (social media, news websites, TV, blogs and broker research forwarded from friends and family).  We have recently introduced a new feature from theScreener, a unique star-rated system that is very easy to use yet powerful – perfect for validating initial investment decisions, or validating the constituents of an existing portfolio.

      II.            Advanced tax and portfolio reporting tools

Advanced reporting tools, beyond standard year- end summary reports are particularly useful and can save investors thousands of dollars when it comes to calculating CGT liability, as well as reducing the admin around tax time. CMC Markets′ integration with Sharesight automatically records trades, dividends and corporate actions.  It even allows investors to consider the disposal method of different parcels of the same security through-out the year as well as access nine types of reports, such as Performance, Taxable Income, Capital Gains (realised and unrealised), and Future Income.

    III.            Technical analysis / educational content / stock tips/ Insights

Whilst the charting on the CMC platform was recently ranked No 1 in an industry survey, we believe the bar can be raised further with the advancement of web technologies.  However, not all investors have the time or inclination to educate themselves on the various studies, overlays and chart types that make up technical analysis.  For this reason our platform is integrated with a feed from an independent research house –Trading Central who provides daily insights (signals and patterns) on ASX stocks.  In addition, our in-house education team, publish daily trading insights via their blog.  This information is then instantly available on the platform and even highlighted at the stock level in the investors watchlist / portfolio.

    IV.            Streaming Data and platform speed and reliability

For the more active trader, we have the option of streaming data allowing clients to view real time market prices and depth.  This is a very popular feature with many traders placing orders directly from the depth screen.  In addition to speed, reliability of the platform is absolutely essential. At CMC our hardware was recently refreshed and is now co-located alongside ASX′s trade matching system in the Australian Liquidity Centre, a state of the art facility.  In addition to this the platform is ′fully redundant′ meaning in the unlikely event we have problems – we can flick a switch and operate from our disaster recovery facility ensuring there is minimal disruption to our service.

      V.            Customer service and an onshore phone dealing team

The best platform features and price point mean nothing if the service is sub-standard. Hence, underpinning our platform is a highly trained and dedicated customer service and phone brokering team all based Sydney.  Industry surveys regularly rank CMC as offering the best telephone service in the industry.

        I.            Platform ease of use

So easily overlooked but of critical importance to the majority of investors.

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