With all the share trading platforms on the market, finding the right broker can be difficult.
But in Australia, there's an additional consideration of whether to choose CHESS or a custody model.
If you are considering signing up to a broker, Finder, using our proprietary algorithm, has come up with a list of CHESS-sponsored brokers worth considering.
How we selected the best CHESS-sponsored brokers
We use our proprietary algorithm in order to give each trading platform a score.
Set up by Finder's data scientists and investment experts, our algorithm takes into account broker fees, trading tools, educational resources and the list of available stock markets on each platform.
Our methodology to select the best CHESS-sponsored brokers rated platforms on the following features:
Availability of ASX CHESS-sponsored equities (Y/N filter)
Order types offered including market order, stop loss and other conditional orders
Research tools including broker ratings, PE ratios, dividend tracking and tax reporting features
Brokerage fees for Australian shares and ETFs
Platform fees including withdrawal fees and inactivity fees
Availability on desktop and mobile
Average user rating
Important: Bear in mind, there's no trading platform that's best for everyone as all our needs are different. What's best for you might not be best for someone else. However we hope this guide can help you to narrow down your options, regardless of your trading style or level of experience. If you're looking for more details, see our full methodology here.
Our top pick for a CHESS-sponsored broker is CMC Invest. It was named the best Overall and Best for Australian Equities in the 2024 Finder Share Trading Platform Awards. CMC offers clients a range of financial options for less. For those looking to trade CHESS-sponsored shares, they offer free brokerage on trades up to $1,000 (on the first buy order on each security, each day).
$0 brokerage on ASX trades under $1,000.
Comprehensive analysis tools for Australian equities.
Access the Cboe and SSX exchanges.
Hefty phone brokerage fees
Higher fees if you trade in some countries.
Brokerage fees: AU stocks: $0 brokerage (for buy orders up to $1,000) and $11 or 0.10% (whichever is greater) for all other buy and sell orders. US stocks: US$0 UK stocks: £0 ETF brokerage fees: AU ETFs: $0 brokerage for trades up to $1,000 (applied to the first buy order per ETF per day). $11 fee for trades up to $10,000. $15 fee for trades equal to or greater than $15,000. US ETFs: US$0 Options: ASX: $33/contract US: Not available Other markets available: Details here Inactivity fee: $0 Currency conversion fee: 0.60% of trade value
Tiger Brokers offers competitive brokerage on CHESS-sponsored shares along with an easy-to-use mobile app, no minimum deposits, trading tools and even a high interest savings account.
Low brokerage fees
Free market data
Quick sign-up
Limited educational resources
Brokerage fees: AU stocks: $2.99 per trade US stocks: US$1.99 UK stocks: Not available Other markets available: Details here ETF brokerage fees: AU stocks: $2.99 per trade US stocks: US$1.99 UK stocks: Not available Other markets available: Details here Options: ASX: Not available US: US$0.95/contract (Min. US$3 per order) Inactivity fee: $0 Currency conversion fee: 55 pips
Stake is one of the cheapest brokers on the market for those investing in ASX CHESS stocks and ETFs, charging just $3 brokerage per trade. As such, it's no surprise it makes our list. Better still, if you refer 3 friends, you can actually get free brokerage on ASX trades for a year.
User-friendly options
Cheap brokerage
Refer-a-friend bonus
Offers both ASX and US stocks
Having to pay for advanced tools through Stake Black
Fewer features than others
Brokerage fees: AU stocks: $3 (Up to and including $30,000); 0.01% (Over $30,000) US stocks: US$3 (Up to and including $30,000); 0.01% (Over $30,000) Other markets: Details here ETF brokerage fees: AU ETFs: $3 US ETFs: US$3 Inactivity fee: $0 Currency conversion fee: 70 pips (US$0.70 for every AUD$100 exchanged)
HSBC Invest offers a high quality trading platform for CHESS sponsored shares with plenty of research tools to keep you interested, including broker ratings, dividend search tools, technical analysis charts and a news feed.
Offers ASX stocks, ETFs and mFunds, ASX options available, High quality research tools
No global stocks, Brokerage fees higher than others, No fractional stocks
Brokerage fee per trade: AU stocks: $19.95 per trade (up to $20,000); 0.11% for trades over $20,000 US stocks: Not available UK stocks: Not available Options: ASX: $30 US: Not available Inactivity fee: $0
Webull is a low cost, easy-to-use app that lets you trade CHESS-sponsored ASX stocks, as well as US and Asian stocks, and offers $0 on ETFs.
$0 ETF brokerage
Low brokerage on ASX shares
Fractional shares
Limited order types
Brokerage fee per trade: AU stocks: $0.0003 per trade value (min $4.90) US stocks: US$0.00025 per trade value UK stocks: Not available Other markets available: Details here ETF brokerage fees: AU stocks: $0 US stocks: US$0 UK stocks: Not available Other markets available: Details here Options: ASX: Not available US: US$0.50 Inactivity fee: $0 Currency conversion fee: 50 bps of trade value
CommSec is arguably the best-known share trading platform in Australia. It is the benchmark when it comes to a number of features, including educational resources, technical analysis tools, built-in broker recommendations and, of course, CHESS-sponsored shares.
Strong news and research ideas
User-friendly, especially for mobile
Data and monitoring tools
No inactivity fees on Australian holdings
Not the cheapest broker around for global stocks
No live chat support
Brokerage fee per trade: AU stocks: $5.00 (up to $1,000 trade value); $10.00 (over $1,000 up to $3,000); $19.95 (over $3,000 up to $10,000); $29.95 (over $10,000 up to $25,000); 0.12% (over $25,000) US stocks: US$5 for trades up to USD$5,000; USD$29.95 for trades up to USD$10,000; 0.31% for trades above USD$10,000 USD$39.95 or 0.40% (whichever is greater) Inactivity fee: $0 Currency conversion fee: 0.55% of trade value
What are HIN and CHESS?
When you sign up with a CHESS-sponsored broker, the ASX will issue a Holder Identification Number (HIN) that is then used whenever you buy shares through that broker.
If you decide to change brokers, this HIN will follow you around as long as the next broker you join is also CHESS sponsored.
If you want to know your HIN, it will be visible on your CHESS statement. HINs start with the letter X, following by a sequence of 10 numbers.
Custodial share trading model
When you sign up to a broker, they'll either run off a CHESS-sponsored or custodian model.
A custodian model basically means the custodian is the legal owner of the shares. This means that the broker owns the shares, not you. You are still a beneficial owner though, meaning you get the same dividends and capital gains. You just don't have the voting rights of CHESS shareholders.
The upside for this model is it is usually cheaper on fees.
The downside of a custodian model is that you have less direct control over your investment and less access to your holdings. Although it is worth pointing out that the entire US system works off a custody model.
Is CHESS getting replaced?
The ASX has long planned to replace CHESS with a new clearing system. CHESS was first introduced in 1994 and has understandably struggled to adapt to the increasing demands of the modern stock market.
This replacement was slated to launch in 2021, following an aborted attempt to use blockchain technology to power the new system. However, the replacement system has been repeatedly been delayed and the ASX is still finalising the launch schedule for CHESS's replacement.1
Pros and cons of CHESS-sponsored shares
Pros
Let's start out with the good.
Direct ownership. With a CHESS-sponsored system lodged with the ASX, you're the legal owner of the shares because of your HIN.Your broker or trading platform simply acts as a middleman between you and the exchange. This means, if the broker happens to go under, your share ownership and the holdings themselves won't be impacted. You can simply shift your holdings over to another platform to continue trading.
Voting rights on shares. Another handy reason to go with CHESS-sponsored shares is that you'll be offered voting rights. As a company owner, you have the right to attend general meetings and to make decisions on directors' remunerations and other key factors that drive business performance. On the other hand, custodial brokers decide whether they wish to pass voting rights onto you or not.
Easier to switch brokers. If you decide to switch brokers, having your shares with a HIN can be incredibly handy. It typically means you'll just need to complete a 2-page online form and your shares will be sent, usually within a week. A custodian broker usually takes a little bit longer to sort out.
Did you know: Recent Finder research found that the average share trader could save approximately $1,048 in brokerage fees a year by switching to a more suitable online broker (calculated on 7 trades per month of $1,000). You might even save money by having more than 1 platform, especially if you are investing in both Australia and internationally.
Cons
Of course, there are some downsides to choosing a CHESS-sponsored model.
Lacks access to international markets. If you're looking to invest around the world, then the CHESS model won't help you since it is an Australian system. In fact, most of the world's largest share markets, including the US, run off a custodial model.
Higher fees. Now this will vary greatly depending on who you actually sign up with, but custodian models can mean cheaper fees for investors. This is one of the major reasons why investors choose them over CHESS sponsorship.
Fractional shares. Under a custodian share model, you can buy and sell fractions of shares, rather than a whole share. This can help you start out sooner especially when you're buying stocks that are hundreds of dollars per share.
Indirect share ownership. Given you aren't the holder of the shares, the custodian broker will do the administration on your behalf.
Want to compare all your options?
Here's a comparison of CHESS and non-CHESS trading platforms available in Australia:
We currently don't have a partnership for that product, but we have other similar offers to choose from (how we picked these
):
Share trading updates: December 2024
December: More records tumble as the S&P 500 hits 6,000 points and the Nasdaq-100 hits 21,000 points for the first time.
November: The Nasdaq-100 and S&P 500 hit new all-time highs following the results of the US election.
October: The ASX 200 posted a new all-time high in October, passing 8,300 points for the first time ever.
September: The ASX 200 and S&P 500 hit new all-time highs in late September as global stock markets continued their strong showing in 2024.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances and obtain your own advice before making any trades.
Frequently asked questions
CHESS-sponsored shares are those that are registered directly in your name. This means that if anything happens to the broker or platform that you bought the shares through, your shares will be secured.
According to our data, CMC Invest is the cheapest broker in Australia for CHESS-sponsored shares, offering $0 brokerage on ASX trades up to $1,000. Tiger Brokers lets you trade CHESS-sponsored shares with $2.99 brokerage, while Stake and moomoo charge $3 per trade.
CHESS-sponsored shares are those held in your name and allocated a HIN, whereas issuer sponsored or custodial shares are held by the broker.
You should be able to sell your CHESS-sponsored shares via the broker or platform you bought them on, or by transferring them to a broker of your choice.
Was this content helpful to you?
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To make sure you get accurate and helpful information, this guide has been edited by David Gregory as part of our fact-checking process.
Tom Stelzer is a publisher and writer for Finder, covering investing and cryptocurrency.
He previously worked for Finder as a writer in Australia and the UK, covering things like personal finance, loans, investing, insurance as well as small business and business loans.
He has a Master of Media Arts and Production and Bachelor of Communications in Journalism from the University of Technology Sydney. See full bio
CMC invest fee is incorrect. It is $0 for AUS stocks only one buys below $1000, per security, per day
Finder
ThomasSeptember 13, 2024Finder
Hi Saeed,
Thanks for your comment. You’re correct, CMC offers $0 brokerage on trades up to $1,000, per security, per day. We do highlight this in our guide, but we will add more detail to make it clearer to readers that this is the case.
Thanks
Tom
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CMC invest fee is incorrect. It is $0 for AUS stocks only one buys below $1000, per security, per day
Hi Saeed,
Thanks for your comment. You’re correct, CMC offers $0 brokerage on trades up to $1,000, per security, per day. We do highlight this in our guide, but we will add more detail to make it clearer to readers that this is the case.
Thanks
Tom