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Traders' Choice Awards
Traders decide the top spots - Winners of the Traders’ Choice Awards
Toni Case - December 10, 2007
Thousands of CompareShares traders and investors cast their vote over the past six months for the CompareShares Traders’ Choice Awards – and we are proud to announce this year’s winners.
The poll targets the best according to a public vote – across margin lending, CFDs, forex, options, warrants, futures, online broking and the best stock forum.
Now we acknowledge that this is a shift from standard Awards offered in Australia where winners are hand picked by a panel of judges. But we sincerely doubt that a random panel of judges can really know the ins and outs of dealing with any firm on a regular basis. Do these judges know how the customer service department operates, have attended seminars held by the firm, had problems resolved and queries attended? We doubt it.
So instead of letting an exclusive panel choose, we thought it best to let the weight of numbers decide; our list of the best brokers across the various categories are based on traders’ recommendations. In short, you have determined this year’s winners.
Most interesting has been the feedback received by the CompareShares team throughout the period that the poll was run. While "cheap brokerage" is a still an important factor for traders when comparing online brokers, less tangible factors are creeping into the equation. Ease of use, speed and reliability of a trading platform have been cited as important points of comparison.
Although a wide range of markets offered by the online broker didn’t rate a mention in our feedback, the ability to trade multiple securities on the one account did. So, in essence, it appears that traders do like brokers that offer trading over a variety of markets, especially if it can be done using the same account.
A broker that deals with disputes in a quick and painless manner also came up as a selling point for traders. Since many traders on CompareShares trade frequently and in fairly hefty volumes it was clear from the feedback received that traders prefer brokers who honour trades to the best of their ability. Traders at the top end develop strong loyalties to particular brokers based on past experience. For example, a dispute between broker and trader was settled fairly.
Taking out the top spots this year were those online brokers that fostered trust and loyalty amongst their client base, who offered trading platforms that were fast and reliable and who offered brokerage at competitive rates.
We are proud to announce this year’s winners of the CompareShares Traders’ Choice Awards.
Winner – Best CFD Provider
Finalists
Taking out the number one spot in CFDs, MF Global has been ranked the best CFD provider in the CompareShares Traders’ Choice Awards.
An early entrant to the CFD market back in 2002, MF Global introduced its flagship direct market access (DMA) style CFDs to Australia that are heralded for transparent pricing and clean-cut execution.
In typical DMA style, every CFD trade is actually executed as a share trade through the Exchange, or putting it another way, when traders buy or sell a CFD through MF Global they actually see their trade sitting in the ITS (Integrated Trading System) queue on the ASX along with other traders, and the trade is "filled" at the identical exchange price. The DMA variety differs to the Market Maker style of CFDs where a synthetic market is created to mirror the underlying market and market liquidity is determined by the CFD provider.
Richard Avery-Wright, managing director of MF Global says that its clients like to see their bids and offers appear in the underlying market. "It helps to keep frictional costs, such as slippage to a minimum, which in turn makes it much easier for the client to profit from their directional views."
Asked why traders have voted MF Global as number one in CFDs, Avery-Wright highlighted customer service as a priority for the team. "Our client services and dealing team pride themselves on having a deep understanding of CFDs and the market in general," he says. Clearly this is a plus for traders dabbling in a market that until 2002 didn’t even exist in Australia for retail punters. For many traders the art of trading CFDs is still more or less unexplored and guidance from those in the know is much heeded.
Avery-Wright also mentioned MF Global’s trading software, eMpower, provided by IRESS Market Technologies as a plus for traders. "eMpower is capable of trading many different asset classes in many different markets. The institutional-like interface and the excellent multi-currency risk management module allows users to easily view their daily profit and loss and positions in real-time," says Avery-Wright.
Overall, the team at MF Global is thrilled to be voted by CompareShares users as the Best CFD provider of the year. "Winning the Compareshares Traders' Choice Award for CFDs is a great honour for all of the staff at MF Global," says Avery-Wright. "Traders and investors in CFDs are ideally placed to make an informed decision on which provider is best for their individual needs. Therefore, it is perhaps a vindication of all the hard work that has gone into providing our CFD clients with a great product and exceptional service. Finally, we would like to thank all our customers for their support and particularly their choice of MF Global as winner of this prestigious prize."
Winner – Best Online Broker
Finalist
CommSec took out the Best Online Broker Award, as hand picked by CompareShares traders and investors. Owning by far the biggest slice of the online broking market in Australia, CommSec also boasts a hefty number of DIY super clients who use its services to buy and sell shares, managed funds or warrants for their DIY accounts.
Possibly the reason CommSec continues to dominate the online share trading landscape is because traders feel comfortable trading with the biggest online broker in town, or perhaps it could be due to CommSec’s research offering – including a newswire service, email alerts and broker recommendations. CommSec's acquisition of IWL this year shows that it is serious about cementing this leading position in the market.
Winner – Best Forex Broker
Finalists
Taking out the winning spot in forex trading is IG Markets. Many would know IG Markets for its CFDs on shares and indices and margined FX. Globally, the wider group, called IG Index, is the biggest spread betting company in the world.
"We are delighted to see that the public see IG as the best forex provider, since a lot of time, effort and investment has gone into our platform and systems over the years," says Tamas Szabo, chief operating officer at IG Markets. "This award acknowledges IG’s investment in staff and systems and helps cement IG as a global leader in forex and CFDs."
Asked why traders voted for IG Markets as the number one for forex, Szabo noted its tight spreads, its trading platform (IG Markets offers both DMA and market-maker style CFD trading) as well as customer service quality. IG Markets offers tight spreads of just 2 pips on currency majors such as AUD/USD, EUR/GBP and EUR/USD, and 3 pip spreads on other major currency pairs. This is consistent across both full-sized and mini forex contracts, which are popular with beginner traders.
Winner – Best Futures Broker
Finalists
The winner of the Best Futures Broker by CompareShares users is BrokerOne.
BrokerOne is the biggest futures broker in Australia – representing the biggest single liquidity pool on the SFE - which probably goes some way to explaining why CompareShares traders have voted it number one in this year’s Traders’ Choice Awards.
BrokerOne offers futures traders access to more than 300 futures products, including futures FX, indices, commodities and interest rates. In late September, BrokerOne was acquired by MF Global.
Craig Roberts, private client manager at BrokerOne says that the futures and CFD broker is "absolutely thrilled and very pleasantly surprised" to be voted the number one in this category. "As a business it is a great compliment to receive an Award voted on by actual traders and investors," he says. "I think it is a testament to the culture we have created here at BrokerOne of being responsive to the clients' needs in terms of information, systems and dealing skills…It’s a credit to the various departments including all the dealing team, back-office, risk and especially the IT department... I would also particularly like to thank our many loyal customers for voting for us."
When dealing a sophisticated and complex product like futures, Roberts says that it’s important that traders can access dedicated staff 24 hours a day via phone or email. "Traders appreciate the comfort of knowing that we can intercept and amend their orders in case of an emergency or if they are out," he says.
When asked why traders voted BrokerOne as the best futures broker in Australia, Roberts mentions education, research and service as important features of a top futures business and areas of importance for the firm. "It’s a pressure business at times but no matter whether the client is a novice or a pro we endeavour to be polite, efficient and informative regardless of the situation," says Roberts. "It maybe helping a professional cancel or amend orders after his computer has blown up or helping a novice get used to his new dealing system."
The challenge of getting beginner traders up to speed with a fairly complex instrument like futures shouldn't be underestimated either. "We have always endeavoured to pass as much knowledge onto our clients as possible, we feel we have achieved this through our series of Traders' Forums where we have bought together successful traders who are actually trading not just educating, together to share their experience and the lessons learned, " notes Roberts. "We also send out numerous daily reports, research and our desk is fully staffed with experienced and accredited personnel," he says.
Winner – Best Warrants Broker
Finalist
Voted the best warrants broker in the market by CompareShares users is Commodity Warrants Australia (CWA), which specialises in global commodity and stock index markets, including gold, silver, crude oil and coffee. Investors and traders at CWA can design their own warrants to benefit from booming commodities prices globally.
A prolonged global commodities boom means that CWA is certainly in the hot seat. Clearly, its warrants over gold, crude oil and other booming commodities such as corn have been popular with investors who use warrants as a leveraged tool into a market that is increasingly moving into the spotlight.
"CWA was up against some major corporates in this category so to be voted best warrant provider is a real feather in our cap," says Peter McGuire, managing director of CWA. "The fact that it was traders and investors who adjudicated makes winning this award even more rewarding," he says.
Asked what makes CWA a popular place to trade warrants, McGuire says: "I’m hesitant to presume what investors and traders believe sets CWA apart, but for our part we have concentrated on offering a simplified product, which is designed for the retail investor. I think investors also like the fact that our product allows them to benefit from leverage and unlimited gains on the upside but have the assurance of limited losses on the downside. And lastly, we have also worked hard to educate retail investors and to demystify the commodity markets and I think our clients and the investment community value this. Our strategy was to offer truly global markets to the Australian retail sector and we believe we have achieved this. We now have 18 markets that we trade and we will be looking at additional markets over the coming years."
Winner – Best Stock Forum
Finalist:
The hotly contested best stock forum for 2008 was awarded to ShareScene.com, which is a general investing forum focussing on shares, charting and general news and events.
"We have always had the support of the investment community and it is a great pleasure for this to be confirmed formally by the 'Forum of the Year' award," says the ShareScene spokesperson. "We wish to express our sincere appreciation and congratulations to the members of ShareScene for their continued support."
When asked for the reasons why ShareScene took out the number one spot, friendly, professional and high quality discussion on the forum was highlight by the ShareScene crew as points of note. "The ShareScene team work extremely hard to encourage, educate and guide the community," the spokesperson says.
"This work is backed up by ShareScene's moderation policies which include a strong stance against personal attacks and a heavily enforced policy of no multiple accounts. The sum of these actions maintain a fair environment and encourage a principle of 'One person, One voice' for all members."
Winner – Best Margin Lender
Finalists
The Best Margin Lender for 2008 is awarded to CommSec, who pipped St George and ANZ for the winning spot. Investors who take out a margin loan with CommSec can use the funds to buy domestic or international shares, managed funds, warrants and options. Investors can also set up a popular strategy called "regular gearing" that involves drip feeding savings plus borrowings into investments over a period of time, rather than throwing the lot in all at once. It’s features like these that traders and investors like in a margin lender, explaining their choice of CommSec as this year’s winner.
Winner – Best Options Broker
Finalist
OptionsXpress is a NASDAQ-listed options specialist that set up Down Under to give traders a taste of its award winning service. It offers equity and options trading on the Australian Securities Exchange as well as equity and derivatives trading on the US market at discounted rates. It’s affordable brokerage, hefty range of markets offered and commitment to educating traders in the art of options trading are some of the reasons why CompareShares traders’ have given OptionsXpress the thumbs up.
If you haven't already subscribed to CompareShares, follow this link to receive your free bi-weekly issue.
More articles from this edition of CompareShares:
Traders’ Choice Awards: Traders & investors decide the top spots
CFDs: Battle of the CFD providers
Stocks: Double digit returns likely in 2008
Trading: The ultimate guide to trading shares for beginners - part 5
Stocks: Stock of the Week: Saferoad Holdings
Smart Investing: Investors have reason to celebrate Reserve Bank transparency
Markets: Australian economy steaming along nicely despite US sub-prime crisis
Trading: Top Ten CFD stocks for the week
Stocks: Stock to watch: Greencross
Companies: BHP takeover bid 'dead': Rio Tinto CEO
Whatever your views, you can discuss this article - or any of Toni's articles - on our message board Your 2 Cents.
Toni Case is Australia’s first journalist to specialise on Contracts for Difference (CFDs). She was a staff writer for Shares, Personal Investor and Asset Magazines, and today is a regular columnist with the Australian Financial Review. She is a qualified financial adviser, and has an Economics (Honours) degree from Sydney University.
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