ANZ & E*TRADE SECURE ON-LINE BROKING PARTNERSHIP
A partnership plan between ANZ & on-line discount broking specialist E*Trade Australia Group is expected to be announced today. The plan is designed to allow ANZ to offer Internet stockbroking services with an ANZ–branded Internet site linked with existing on-line bank offerings, supported by the back-office strengths and systems of E*Trade.
ANZ has been exploring ways to secure a cost-effective way to accommodate its retail customer base with a stockbroking service. ANZ sources noted that after reviewing the on-line broking market, the bank had considered a possible purchase of E*Trade which is currently Australia’s second largest discount stockbroking group. However a low-cost, relatively low risk partnership became the preferred option.
Discount broking is the stockmarkets fastest growing area due to a wave of high profile demutualisations and privatisations. The new breed of retail investor is high in equity market awareness unwilling to pay high fees to ‘full – service’ brokers and holds a self managed share portfolio.
It is a niche customer that has been successfully catered to already by Commonwealth Securities launched in 1997 by Commonwealth Bank. A strong brand and huge customer base has provided the bank with a very powerful distribution network for any corporate deal. Of its 320,000 clients, 60,000 currently deal exclusively on-line.
In light of this many of the other banks are also ready to chance their arm in discount broking. Westpac is anticipated to be operational in the next few months, while National Australia Bank is exploring alliance opportunities. Macquarie Bank and Bendigo Bank have tie-ups with Austock.
E*Trade is a listed franchise of the California based E*Trade Group. In April, Computershare ploughed $23million into E*Trade to take a 15% stake in the company.