Fees for trading in NZ stocks seem to be still based on ancient premises – percentage takes and high rates. Here are ASB’s fees – they charge you the same $30 for a $500 or $10,000 transaction.
Ditto with Direct Broking, who have a slightly lower ticket clipping rate, but still set the baseline at $30 per trade, and thus will charge you the same for a $500 trade and a $15,000 trade.
In the USA it is all flat rate, and a much lower rate at that. Most normal investors would pay the $10 fee, which is almost a third as cheap as the NZ and Australian fees. A $30,000 trade in the US would cost $10, versus $90 on ASB and $60 on Direct Broking.
I daresay the execution on eTrade would be an order of magnitude better as well.
Even options are cheap to buy on eTrade:
eTrade.com manage to avoid those rising commissions for their global fees:
eTrade Australia also charges high fees and clips the ticket on larger transactions. They reward heavy traders with lower fees, but these pale in comparison with eTrade USA’s $10 trades.
So either the market for retail broking is not efficient in Australia and NZ (another cosy NZ duopoly?), or the transactions are inefficiently managed resulting in higher costs, or the exchanges are charging higher fees….
…or all of the above, which is my uninformed pick.