Australia-based US share-trading platform, Stake, is hiring up in NZ as it seeks to build on rapid client growth this side of the Tasman.
In Auckland last week before the NSW travel bubble burst, Stake founder, Matt Leibowitz, said the platform had signed up over 40,000 Kiwi investors, or almost 12 per cent of the group’s global clientbase of 350,000.
Leibowitz said Stake was looking to establish several positions in NZ, completing a number of interviews during the recent trans-Tasman visit.
“We think there’s much more growth in NZ for us,” he said. “And we’re committed to investing locally to extend both the level of service and products for NZ clients.”
The firm was considering adding services such as margin trading and options as well as moving beyond its current US stock market focus to other exchanges such as the NZX and ASX.
Like NZ-based rivals Sharesies and Hatch (owned by Kiwi Wealth), Stake uses the New Jersey-headquartered online brokerage, DriveWealth, as the back-end US share-trading service.
While all three offer access to exactly the same US broker, Leibowitz said Stake provides differentiated services aimed at more sophisticated investors than the two Kiwi firms.
He said almost 80 per cent of Stake clients had at least some share-trading experience prior to joining the platform.
Stake has established operations in UK, Brazil as well as its home country, riding the global boom in online retail share trading that has accelerated to warp speed post the COVID crash last March.
According to the latest DriveWealth ‘Retail trends report’, during the first quarter of 2021 “trading volume and asset growth outpaced the markets once again, rising 45% and 33% respectively between 4Q20 and 1Q21, eclipsing the S&P 500 at 5.8% and NASDAQ at 2.8%”.
The DriveWealth study, based on client behaviour in all regions including Asia-Pacific, found a 66 per cent increase in the number of trades during the first three months of this year compared to the December 2020 quarter.
“Investors traded more often, but smaller amounts in 1Q compared to last quarter,” the report says, with the average trade size of US$286 down 15 per cent quarter-on-quarter.
DriveWealth APAC clients reported the largest average trade size, however, with ‘meme’ stocks GameStop, Tesla and AMC Entertainment ranking first, second and third, respectively, in as the most popular picks in the region.
The Ark Invest Innovation ETF also featured high in the popularity stakes for DriveWealth clients in APAC, the only region where the smash-hit product made the top-10 trade list for the quarter.
Over 90 per cent of all DriveWealth trades involve fractional shares, the study says.
But just as Stake puts boots on the ground in NZ, competitor (at least in US equities trading) Sharesies has officially launched operations in Australia.
Sharesies, which coincidentally boasts the same number of clients as Stake – 350,000, opened for business in Australia in April flying under the financial services licence (AFSL) of Sanlam Private Wealth. Also coincidentally, Stake operates in Australia through the Sanlam AFSL.
Platform providers don’t have to be licensed in NZ but both Sharesies and Stake are listed on the Financial Services Providers Register.
In Australia, Sharesies has partnered with brokerage firm CMC Markets to provide ASX share-trading whereas in NZ the firm is an NZX broking participant in its own right. At launch, the NZ firm is offering Australians access to NZ, ASX and US equities only: at home the platform also sells a range of managed funds.
Sharesies opened a Sydney office in April with three employees including Philip Barnes as Australia head of operations. Barnes was previously head of product for the National Stock Exchange of Australia following six years with ANZ mostly working on the bank’s share investing platforms.
The cross-Tasman financial services fertilisation trend has picked up in recent times with Jarden, for example, making an ambitious investment banking foray in Australia last year.
And in April, Australian exchange-traded fund (ETF) specialist, BetaShares, confirmed an NZ landing, as first reported here, with the appointment of Thom Bentley as head of institutional and adviser business. Bentley was previously director institutional at the NZX-owned Smartshares.
In a statement last week, BetaShares founder, Alex Vynokur, said: “Over the years, we have developed a number of long-standing relationships with institutions and advisers in New Zealand, which we have to date serviced out of our Australian offices. We are now excited to deepen our presence in the New Zealand market via a local office, which will help us to better service the needs of New Zealand investors with our extensive range of intelligent investment solutions.”
Meanwhile, another NZ financial services brand, Milford Asset Management, continued with its Australian expansion efforts last week, appointing Murray Pell as head of wholesale distribution.
Milford, which had long operated a Sydney investment office, set up a separate Australian operations about three years ago, targeting distribution via independent financial advisers.
As well as Pell, Milford hired Queensland-based regional manager, Brad Mackay, and business development manager, Rachael Satchell, to ratchet up sales.
Milford Australian business head, Kristine Brooks, said in a release: “The appointment of Murray, Brad, and Rachael will allow us to uphold our excellence in client service and engagement while building on our offering and products for the benefit of Australian investors.”