Comsec aims to provide full service broking

Commonwealth Securities (Comsec), Australia’s largest online broker, is looking to launch an online equities and advisory service targeting corporate clients by leveraging off its retail presence.

Comsec’s plans follow previous activity by Etrade and Greenline in managing or co-managing company floats, representing the first signs of an online institutional equities market.

This development among the online broking firms is important on two fronts.

Firstly, it is becoming increasingly important that online broking firms have access to company floats. Australia’s increasing shareholder base is all too aware of the historical gains made from privatisations and IPO’s, particularly internet stocks. Access to these will become a key factor for some investors when considering the variety of services offered by online brokers.
Secondly, the ability to offer advice will appeal to a broad range of investors, as competition for market share among online brokers becomes intense.

Comsec’s success to date has been in part due to its early emergence in online discount broking and its ability to service its retail client base. Comsec is expected to have a similar impact in the institutional market due to its pre-existing client base. A client base not shared by the independent online brokers.