CMC markets lets you trade shares in both Australian Domestic and International markets with competitive brokerage rates – starting at $11 or .10% for their classic account, and $9.90 or 0.075% for their premium subscription, with $0 brokerage on international shares*). With nearly 100,000 active customers, 700 staff and offices in over 15 countries, CMC markets is a well established and trusted company in the finance industry having operated for over 30 years – and it is even publicly traded on the London stock exchange with a market capital of nearly AUD $1 Billion.
This article will explore some of the features of CMC Markets share brokering service, and weigh up some of the pros and cons of using CMC Markets on your journey to Financial Independence.
“Best Cheapest Online Broker 2011, 2012, 2013, 2014, 2015, 2016 and 2017, and Best feature-packed Non-Bank Online Broker 2020”Money magazine
* International shares are brokerage free for US, UK, Canada and Japan, but subject to currency conversion fees and floating foreign currency exchange rates set by CMC Markets. For other international countries, it is $60 per trade.
Founded in the UK in 1989, CMC Markets grew to become one of the leading retail FOREX, and CFD brokerages globally allowing people to day trade a range of products. With offices in over 15 countries and nearly 700 employees, CMC Markets is regulated in the United Kingdom, Canada, Singapore and Australia. They are even listed on the London Stock Exchange (LSE:CMCX), with a market capitalization of nearly AUD $1 Billion (and are even currently providing their investors with a decent dividend of nearly 5%).
Whilst CMC markets provide access to a diverse range of financial products, we aren’t necessarily here for that – those on the path to Financial Independence are looking at CMC markets for its basic and low cost share trading features so we can buy and hold conventional shares, like the low fee ETFs and LICs we know and love!
Management and team behind CMC Markets
CMC Markets is run by over 700 employees across 15 countries, with their global headquarters in London, England (United Kingdom).
“CMC Markets received the highest client satisfaction ratings for the ease of navigation, charting and low brokerage – Investment Trends 2017 First Half Online Broking industry report”Irene Guiamatsia, Research Director [Investment Trends]
CMC Markets provide great customer support, with hundreds of detailed guides, FAQ and help articles on their website. They offer, email and phone support in a number of common languages, and are active on social media on Twitter, LinkedIn, Youtube and Facebook. I was able to get in touch with them through email with a response in under an hour.
Strangely, they seem to turn their live chat function on and off, and this receives mixed reviews from customers.
What trading features do CMC Markets offer?
With a standard CMC Markets brokerage account, you can trade with execution times under 1 second in the following markets;
- Australian shares
- International shares
- Exchange Traded Funds (ETFs)
- Listed Investment Companies (LICs)
- Interest Rate Securities
- Managed funds
- Initial Public Offerings (IPOs)
CMC Markets educational material
CMC Markets also offer a heap of free guides and educational information on their blog about trading and the share market in general – such as their introduction to share trading guide. They also provide detailed guides on how to use their various investment products, which is good.
They also have a partnership with Sharesight; If you use their classic trader account, you can get access to a basic Sharesight account to track under ten holdings, but with a CMC Markets premium trader account you get access to a premium Sharesight subscription to rack unlimited holdings. This, combined with CMC Markets internal software allows you to have the following features;
- Track your individual shareholdings
- Portfolio reports and sharing
- Tax reporting and unrealised CGT modelling
- Performance Ranking and Benchmarking
- Xero integration
Funding and Margin trading with CMC markets
The standard way to fund your investments is through your linked Macquarie Cash Management Account which CMC markets will open on your behalf when you sign up. Prior to 13 July 2020 this was with BankWest, however it has since moved to Macquarie. You can deposit funds suing BPAY or direct bank transfer, and CMC Markets charge a .25% Broker Service Fee on the balance of your Cash Management Account.
If you wish to gear your investments by trading on margin, they offer a linked margin loan service through either Leveraged (Bendigo and Adelaide banks) or St. George Bank Margin lending. I personally am not a fan of trading on margin because of the increased risk and stress factor, and prefer to fund my investments directly.
Brokerage fees of CMC Markets
CMC Markets offer three tiers of online brokerage for investors buying Australian shares, depending on their trading frequency. International shares (US, UK, Japanese and Canadian markets only) are brokerage free but have a minimum trade of $1000 and are subject to a currency conversion fee and foreign currency exchange conversion rate set by CMC Markets. For other international countries, it is $60 per trade. You can also make phone trades, but these are horribly expensive in comparison (like $60 a pop expensive!) and so I would suggest you just drop the idea entirely.
Classic Trader with CMC Markets
If you make less than ten trades per month (the overwhelming majority of us) then you will fit into the classic trader tier. This is their ‘no frills’ option which provides you with basic features such as conditional orders, and 20 minute delayed pricing data.
You can pay a $10 a month subscription to get access to Live price data (active tier), or $40 per month subscription for access to Dynamic Price Data (premium tier) – if you later qualify for these tiers based on number of trades, the fee is refunded.
Trade on our feature rich standard platform and access theScreener stock level analysis and free tax and portfolio reporting with SharesightTM (up to 10 holdings). With one of the lowest brokerages in market, pay $11 or 0.10% per trade.CMC Markets
The Classic Trader is by far the most popular option, and I think is best suited to most people on the path to Financial Independence.
Active Trader with CMC Markets
If you make more than ten trades per month (or rack up more than $500 in brokerage fees across 5 trades), then you will qualify for slightly cheaper brokerage and additional features with the Active Trader tier.
You’ll have access to all Classic tier features plus brokerage from $9.90/0.10%, access to our Pro stockbroking platform, free live data, Trading Central technical analysis daily emails, theScreener research reports and much more.CMC Markets
Premium Trader with CMC Markets
If you make more than 30 trades per month, you will qualify for CMC Markets top brokerage tier with the Premium Trader tier. This reduces your percentage brokerage to their lowerst offering, and gives you access to all of CMC Markets trading features and information.
With the best frequent trader rate in the market, $9.90 or 0.075%, you’ll have access to all tier benefits plus free dynamic data, tax and portfolio reporting with Sharesight Investor Level package and exclusive access to premium client and education events.CMC Markets
CMC Markets mobile app
CMC markets have mobile applications that let you trade on your phone or tablet (Apple iOS and android), so your not just limited to a laptop or desktop PC.
On their mobile applications, CMC Markets have full functionality to access your stockbroking account, transfer money, place, amend or cancel direct, conditional and linked share trading orders, as well as review your trading history.
Is CMC markets safe to trade with?
CMC Markets are a highly trusted international broker, and use SSL encyprtion and third party verification for their online trading platforms. They are regulated by the;
- Australian Securities & Investment Commission (ASIC)
- Investment Industry Regulatory Organization of Canada (IIROC)
- Monetary Authority of Singapore (MAS)
- United Kingdom Financial Conduct Authority (FCA).
They also have CHESS (Clearing House Electronic Sub-register System) sponsorship on the ASX which provides peace of mind for investors to know that holdings are going to be in your name.
How to sign up for CMC Markets
Signing up for a CMC Markets share trading account is pretty straight forward, they have a standard online registration form which you can fill out, and then you need to wait for it to be approved. You can open an account for;
- Individual account (paper form here)
- Joint account (paper form here)
- Trust account (paper form here)
- Company account (paper form here)
You need to provide CMC Markets with the standard identification and security documents (anti money laundering and anti terrorism requirement) which might take up to a couple of days to be processed. Then you simply transfer of BPAY into your CMC Markets cash management account, and are ready to make your first trade.
Personal details that you will need for the application include:
- Your Tax File Number (TFN)
- Your Driver’s licence number
- Your bank account details (to set a linked account)
Check out CMC Markets FAQ Stockbroking Application and accounts User guide for the detailed list of alternatives.
Stand-by for an update here as I get an account and review how to actusally log in and buy shares using CMC markets.
CMC markets is a well established global financial firm that lets you trade shares in both Australian Domestic and International markets with competitive brokerage rates. I dislike their percentage based brokerage structure and their incentives to trade more frequently. Those of us on the path to Financial Independence typically have a buy and hold mentality using a couple of diversified low-fee ETFs – we do not need to see live or dynamic pricing since we aren’t day traders, and we usually have well thought out investment strategies which typically only involve making one investment trade or so per month.
However, their percentage based brokerage fee only kicks in for trades over $11,000, and below this you will be paying a flat rate of $11 per trade (Classic trader account). Many of us will not be investing over that threshold, and so $11 is a pretty good rate in my opinion. Furthermore, CMC markets provides a user friendly mobile app, and if you have the self discipline to avoid being sucked into day trading, then CMC Markets makes an attractive, low cost choice as a broker to buy your shares.
Do you use CMC Markets? Let me know your experience with them in the comments below!