eToro announces zero-commission trading on all ASX stocks

From 9 March, investors will be able to buy and sell ASX stocks without any commission fees on eToro.

Previously, $0 brokerage fees only applied to US stocks, but this has now been expanded for Australian customers trading domestically.

ASX stocks currently available on eToro include BHP, Westpac, Rio Tinto, Goodman Group and Coles Group.

With minimum deposit sizes at just USD $50, Robert Francis, Managing Director at eToro Australia said that the move was in step with eToro's goal of democratizing securities trading.

"At eToro, we want to empower people to build their wealth and grow their knowledge of financial markets," Mr Francis said.

"Offering commission-free stocks is a key part of that mission as it significantly lowers the barriers to entry."

The Australian appetite for retail trading

The lacklustre 2022 performance of ASX shares, combined with increasing returns on savings accounts and term deposits, could see Australians turning away from trading platforms this year.

Speaking to the Savings Tip Jar Podcast, economist Warren Hogan said the term deposit will be an increasingly attractive store of wealth over the next couple years.

"We haven't fully seen the adjustment in asset markets and equities in commercial and residential property," Mr Hogan said.

"In the next year or so a lot more people will want to take a very careful position with their wealth and savings."

However eToro research has found that 68% of Australian retail investors still plan to invest in domestic stocks over the first quarter of this year.

Robert Francis, Managing Director at eToro Australia, said that the Australian user base has grown by more than 400% since the 2018 launch, and that Australian investors are becoming increasingly comfortable with more advanced trading concepts.

"Today, retail investors are a sophisticated community that wants to take part in annual general meetings, consider ESG [environmental social governance shares] as part of their investment strategies and has a long-term outlook, holding steady or repositioning towards more defensive assets during market downturns," Mr Francis said.

The investment strategies of more than 30 million eToro users are shared, so anyone can follow the approaches of those who have been the most successful.

How will eToro make money?

Inevitably, commission free does not mean entirely cost-free.

Since eToro is a US platform, there is a conversion fee to transfer deposits in AUD to USD.

Withdrawals also incur this conversion fee, as well as a separate withdrawal charge.

eToro also charge a monthly inactivity fee once there has been no activity on an account for more than one year.

However, eToro does not charge the management, administration or ticketing fees commonplace on other trading platforms, while it also absorbs Stamp Duty and Financial Transaction Tax for clients where applicable.

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