Superhero Trading Platform Review | Australia's Cheapest Brokerage

In this video I'm looking into the new trading platform Superhero, backed up by founders of ZIP Co and Afterpay as they look to provide an Australian solution to Robinhood.

So in this video I want to go into the platform have a look at the pros and cons and also draw comparisons to other platforms in terms of both price and features. I’ll also go through the platform so you can see what it’s like and whether it might be a good fit for you. In the Australian share market space most investors are still using Commsec and it’s not surprising given it’s Australia’s biggest bank so people will just move from the bank onto the native trading platform and it’s much easier to migrate your personal info over to create an account.

I’m not sure about you but I actually enjoy Commsec, everything from the colour scheme being black and yellow to the mobile apps which is suited for when you use your phone or tablet. So for the price of free because they don’t have any monthly fees you can get the live pricing on the watch list and a few other features, which is why I stayed on it for quite sometime and still use the platform to look at prices and some info to this day.

But, there’s always a but. The price for trading with Commsec is anything but ideal. It starts at $10 for values up to $1,000, of which a minimum of $500 much be met. Now this is the fee you’ll see advertised on their platform or any advertising that you can start trading from $10 a trade, but in reality most people will opt to put in more than $1,000, unless you’re a new trader and used to platforms like spaceship or acorns who do the micro investing, in which $1,000 might seem like a lot of money.
It’s $19.95 for trades up to $10,000; up to $25,000 costs $29.95 and anything above that is 0.12% of which the minimum is $30.

When I look at this pricing structure I think it’s rather expensive when you have platforms like Selfwealth, which has blown up recently giving trades at a flat fee of $9.95 regardless of the amount you’re investing. Now for some of you, this might not be a big deal especially when you’re investing or trading such large amounts of money, but I would argue that just like interest rates, lowering your brokerage fee is important because it is one of the aspects of investing that you can control. As stocks go up or down, your brokerage fee stays the same depending on the platform that you’re on. It also is a barrier to entry which is why we’ve seen the rise in popularity for free brokerage.

So Superhero is coming in with $5 brokerage, you can see it’s opened to a whole new demographic, those were never even into investing can hear about $5 brokerage and get on board because the barrier to entry is so low, with just wait for it… $100 minimum to start trading. So realistically you really only need a minimum of $105 to start buying your first lot of shares..

Now if you’re familiar with the apps that offer free brokerage in the US, all those platforms make their money on the backend by selling your orders or through the interest that they get through margin accounts, where they lend you money to trade. So how does Superhero keep its costs so low?

This was a question I had so I did a bit of digging and luckily the guys at Finder had already made an article on it and their F&Qs have provided some insight. But basically instead of everyone having their own HIN, like in most Australian brokerages which protects your ownership if the brokerages goes bankrupt. To reduce fees they have a special purpose HIN, which allows them to hold onto the shares on your behalf and you are the beneficiary, which is very similar to having a nominee or holding company.

Now to get a clearer picture, we head to investopedia who said highlights that a nominee is a person or company, in this case is Superhero is entrusted with safekeeping of the securities, whilst you the beneficiary retains ownership of the shares. Which in contrast to most brokerages who use individual HINs which means you have ownership of the shares regardless of what happens. Assuming the ASX continues to operate that is :)

But before you freak out, these nominees are common in brokerages that offer low brokerage because it’s much cheaper to operate on than having a bunch of HINs. Instead your securities are being held by Super Hero Nominees through a bare trust as and you stand to the beneficiary, which to my understanding is how it’s done in the United States. The other way they save costs is by completing settlements of trades at the end of the day to save costs. However, if there’s one thing we Australian’s like it’s ownership whether its your home, car or equities ownership is something Australian’s are very proud of so we’ll see where this all heads. But I can imagine new investors who see a cheap brokerage not really give a damn because well competitors like Acorns and Spaceship never really got involved with that stuff anyways.

Видео Superhero Trading Platform Review | Australia's Cheapest Brokerage канала Lee Vo