It was only back in September last year that we reported that a new brokering app called Superhero was about to take the ASX by storm.
By offering a market-leading $5 brokerage on all trades, Superhero was an exciting development for many ASX investors. Indeed, this was made especially so by the co-involvement of Afterpay Ltd (ASX: APT) co-founder Nick Molnar. In addition to Zip Co Ltd's (ASX: Z1P) Larry Diamond.
Compared to the 'old-guard' of ASX brokers like Commonwealth Bank of Australia's (ASX: CBA) CommSec, Superhero was certainly something different. So much so that some commentators dubbed it 'the Australian Robinhood'. Robinhood is the uber-popular US brokering app beloved by millennials in particular.
But today, we get to report on another entry to the ASX brokering market.
Enter Sharesies
According to reporting in The Sydney Morning Herald (SMH) this morning, the New Zealand-based share trading platform Sharesies is set to begin offering ASX shares for trade on its platform this month. Sharesies has been available for Kiwi investors since 2017. It offers trading in the New York Stock Exchange. Additionally, it also offers trading in the Nasdaq and the New Zealand Stock Exchange (yes, that's a thing). It reportedly has 320,000 existing customers and $1 billion in funds under management. Co-founder Brooke Roberts states it "will be the first platform on the ASX to offer trades from as low as 1 cent".
It will also differ from existing low-cost brokers like Superhero and the US shares-only Stake. Due to its "focus on financial literacy and education".
Here's some of what Ms. Roberts told the SMH about Sharesies:
What we've built Sharesies for is to enable people to build a portfolio with amounts they can afford and that's what we always go back to… It's not a get-rich-quick scheme, it's not timing the market, it's about time in the market… We just use everyday language, and we've really worked on creating a platform that feels accessible for everyone and means that people do become investors and feel like they can start growing their wealth.
How will this broker make money?
The SMH report doesn't go into how Sharesies actually makes money. One wouldn't think it would make a killing from 1 cent brokerage. But according to Sharesies' New Zealand website, the platform is run using a subscription system as well. In New Zealand, there are 2 ways you pay. For those with a portfolio value of between NZ$50 and NZ$3,000, there is a NZ$1.50 a month subscription fee. It's NZ$3 a month for portfolios over NZ$3,000 and free for portfolios with NZ$0-50.
In addition, Sharesies also hits each transaction with a fee (pretty much brokerage). This is charged at 0.5% for orders up to NZ$3,000, and an additional 0.1% for orders over NZ$3,000. For New Zealanders who trade on the US market, a currency exchange fee of 0.4% is also charged on cash moving between the two currencies.
According to the company's Australian website, the pricing structure will be the same for Sharesies Australian customers.
Watch this space!
*Editor's note: this article was amended on 8 March 2021 to clarify Sharesies' pricing structure.
