If you're looking to start investing in shares, choosing a share-trading platform is the first step.
If you’re kickstarting your investing journey, picking the right share-trading platform can be just as important as picking the right shares.
Back in the day, shares were traded through brokers; these dudes were “middle men” that facilitated trades between buyers and sellers and made their money by charging a fee to make the trade.
Today, we still have IRL brokers, but most people trade shares via online trading platforms, many of which are accessible on apps.
Now, choosing the right platform can be tricky; Reddit says one thing, your mate swears by another platform, and all your Googling has got you more confused than when you started looking.
The ‘right platform’ ultimately depends on what you prioritise as an investor, but there are a few key categories to look into in your decision making.
Before getting into the weeds with trading platform features, start by understanding your personal investment goals, as this will help you narrow down on what platform is best for you.
Are you a newbie investor or an investing wizz?
Are you a set and forget investor? Or are you keen to dive deep into the analysis of different stocks.
Are you planning to invest in just Australian stocks? Or do you want exposure to international markets too?
Answering these questions will help you shortlist a platform faster, because not every feature trading platforms have to offer will be relevant for you.
Of course, fees are one of the biggest considerations in choosing a trading platform.
The way fees are structured for different trading platforms differs but generally there are some main fees.
Trading fees: This is a fee charged on each trade that you make. Sometimes that's a percentage of your trade, other times it’s a flat fee, and sometimes it’s even a combination of both.
As an example, Stake is a platform that charges a flat fee of $3 for any trade up to $30,000, or 0.01% on trades above $30,000.
Account opening fees: These ones are a bit evil, because you can’t try before you buy with the platform
Management/Advisory fees: Some trading platforms charge ongoing maintenance fees
Have a look at the fee structure of different trading platforms, and consider whether you’re more likely to make smaller or larger trades in your investing lifestyle?
Inactivity fees: Some brokers charge you if you’re not using your trading account often enough, so be wary of inactivity fees when selecting a trading platform.
If you’re just starting out in growing your investment portfolio, building confidence can be a process, but it’s all about taking small and consistent steps.
Some trading platforms have minimum investment amounts that can range anywhere from $1 to $500 or even more.
When you’re new to your investing journey, investing small amounts might be easier for you so keep your eyes peeled for what minimum investment amounts are required by different platforms.
Trading platforms are becoming more than just online brokers, many of them offer extensive education content too, and even advice.
Particularly if you’re a new investor and keen to sharpen your skills along the journey, your ideal trading platform should offer access to investing content that interests you.
That might be in the form of newsletters, blog posts, in-app education resources, and social media accounts.
And if you’re new to getting into the share market, the Flux Academy, Investing In The Share Market is a great place to start.
Some trading platforms even offer ‘robo-advisors’ that can offer financial advice or create financial plans for customers.
These features however often come with additional fees.
If you’re the sort of person that throws out the instruction manual when you’re assembling furniture, and just wings it then this one is definitely big for you.
Your platform will ideally have tutorials (even if you ignore them, it’s good to know they’re there) that tell you how to navigate the app.
If you’re on a treasure hunt to find the right buttons everytime you open your trading platform, you could be dissuaded from investing all together.
Saving the best and most important for last. Check to make sure your broker has a licence with ASIC, the regulatory body, and have a suss of their data-protection policies too.
When you’re dealing with your hard-earned money, getting yourself across the t’s and c’s can really pay off.
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