New fintech Marketech offers $5 stock trading sponsored by CHESS which is different from low cost brokerage platforms.
The Australian Securities Exchange (ASX)’s ‘Clearing House Electronic Subregister System’ – CHESS – essentially means that there is a paper trail that you own the stock.
This works by assigning a HIN or Holder Identification Number to each individual.
This is different from a few other stock trading platforms, which pool investors’ money in a trust and invest the money for them.
There are two payment options through Marketech:
- ‘FocusLite’ which does not charge a monthly fee, yet charges $10 for transactions from $500 to $25,000, or 0.04% for transactions over $25,000.
- ‘Focus’ attracts a monthly subscription fee of $45 and transactions are $5 or 0.02%, respectively.
Savings.com.au spoke to CEO Travis Clark (pictured below) to find out what sets Marketech apart from the rest.
How important is it to be allocated shares to your HIN/CHESS sponsorship?
“Very bad. I’m not saying all pooled trusts will fail, but many pooled trusts have failed,” said Mr Clark.
“It’s like saying I don’t need a seat belt because I haven’t had a crash lately. If we have CHESS, we should use CHESS. Pooling funds isn’t that much cheaper.
“As far as I know, we’re also the only broker that doesn’t make money from your stock trading, so our goal is to make the platform better – not to try to find new new ways to get you to trade more.”
Trading from $5 is still very cheap – how can Marketech offer something so cheap?
“Ignore the brokerage fee, that’s not Marketech’s point. We’re just passing on the wholesale fee,” said Mr. Clark.
“It’s cheap, but we’re not just another ‘cheap broker’. It’s possible to use technology to be both ‘good’ and ‘cheap’, we happen to be the only ones doing that.
“We are selling a platform, trading is just a function to make the platform more attractive.
“We make our margin in a monthly subscription on top of the cost of the ASX data, so everyone pays the same because that’s what fee-for-service was meant to be.
“Again, being tech, we look for systems and automations when we have a problem, which means we don’t need hundreds of employees either.
“The benefit of all of this is that we don’t benefit if you trade or not, and we just want to keep building the platform to make it better. So our goals are aligned with our customers, not designed to raise more money. take away from them.”
What sets Marketech apart from others?
“Marketech is a technology company. Most online brokers are just online brokers, not technology companies, so they rely on others to provide them with their proper trading platform — if they have one at all,” said Mr. Clark.
“We wanted to give retail investors the same data and tools as the pros.
“It’s hard to explain exactly what that means, but it’s a bit like asking someone what makes a Ferrari better than a Hyundai – harder to do if you haven’t driven a Ferrari.”
What characteristics make Marketech distinctive?
“Most original online brokers offer a free website with click-to-refresh data – because it’s cheaper – then sell you to IRESS Viewpoint if you’re serious enough to know what you’re missing,” said Mr. Clark.
“We are streaming live through a professional platform as the stock market is supposed to be about having a level playing field.
“Some new players only show Chi-X, others only show 20 minutes of delayed data. We think that’s a pretty shady way to be cheaper.
“We built it in the cloud and after mobile phones were invented, the platform has full functionality on mobile while all other real trading platforms are PC only.
“And we’re the only ones who have live streaming access to the ASX, Chi-X and the NSX. We could do that pretty easily. Because we’re a technology company.”
How does Marketech technology work?
“By connecting to Openmarkets for their trading and settlement function through a Macquarie CMA [cash management account]we have transformed the platform into an online broker,” said Mr. Clark.
“We then connected to Sharesight so people could have portfolio reports, and Marcus Today so they could get education and trading advice.
“Openmarkets, Macquarie, Sharesight, Marcus Today, Marketech. All connected, all the best specialists – it’s cheap too.”
Photo by Robb Miller on Unsplash
Photo provided by Travis Clark