Australian broker enters NZ market
Australia's number two Internet-based broker Sanford Securities comes to New Zealand.
Saturday, September 11th 1999, 12:00AM
Origins
Sanford Securities Pty Limited - an international stockbroking firm - is the brainchild of 31 year-old deputy managing director, Steven Goh. Along with his father, managing director Dr Bean-San Goh, Steven founded Sanford Securities in Perth during November 1996.
Steven's inspiration for Sanford originated from following the fortunes of a US online discount stockbroker, Lombard Securities, known DaTek. After extensive feasibility work, Steven, a former stockbroker and technology enthusiast decided upon a similar venture for the Australian stockbroking industry. Beginning as a small office in West Perth, five IT (information technology) specialists, including Steven himself, began the arduous task of coding and developing the technology behind Sanford. Nine months after establishment, the firm's first trade was executed in July 1997 followed by the launch of its web site in September 1997.
With fortuitous timing, the immensely popular Telstra float in November 1997 provided Sanford with an excellent opportunity to promote its services to the Australian online market.
Sanford's presence provided competition for Commonwealth Securities (ComSec). One month later E*Trade entered the Australian online market.
In March 1998, Sanford Securities Pty Limited advertised the lowest brokerage rate in the country at A$29.95. Six weeks later ComSec followed suite with a A$29.00 broking fee. Sanford now offers an online broking charge of A$28.95 and A$39.95 for orders by phone and fax.
Current
Sanford is a non-advisory, medium-sized broking firm in Australia. By volume and turnover, it is ranked 36th and 47th respectively out of the nation's 83 broking firms (Source: Beacon 11/03/99). Of the eight-three broking firms in Australia, only five have a material Internet presence, these are Comsec, E*Trade, Sanford, Greenline and Macquarie. Of these five however, only two are internet-based broking firms; Sanford and E*Trade.
Sanford currently boasts a clientele of almost 13,000, growing at 15% - 18% per month. The company offers these clients both information and trading services.
Sanford's web site is currently ranked the second most popular online broking site after ComSec, the 13th most accessed web site in attracting over 1.25 million daily hits. E*Trade is ranked 58th, Macquarie 75th and Greenline 436th. (Source: www.top100.com.au as at 5 May 1999)
According to Sanford's recent estimates there are 70 - 80,000 online share traders in Australia, a figure that is expected to swell to approx 355,000 by the year 2003. Sanford also estimates that between 4 - 6% of all trades in Australia are presently Internet trades, predicting that the figure will increase to between 15 and 18% within three years. Such optimistic forecasts have been buoyed by the increasing popularity of the sharemarket for individual Australia investors. Since 1991, the percentage of Australian ownership of equities, both directly and indirectly, has risen from around 23% to over 40%. (Source: ASX Share Ownership Survey 1998)
Future
Sanford has a number of plans for the future, including a public floatation in July 1999. Sanford has decided to float to further its business development and provide public investors with the opportunity to participate in an exciting public growth industry.
Sanford aims to become a broad-based provider of financial services over the Internet. It has already launched "Virtual Broker" - an online package for the financial planning, accounting and insurance markets.
Sanford Securities offers phone and on-line broking services as well as two types of information services.
Sanford Securities is the only Australian on-line broker to trade all Australian Exchange listed options warrants and ordinary shares.
On-line trading starts at A$28.95 for trades under A$28,950.00. Trades over this amount attract a brokerage of 0.1% to a maximum of A$50,000.00
Phone trading starts at A$39.95 for trades up to A$39,950.00. Trades over this amount attract a 0.1% brokerage to a maximum of A$20,000.00.
Two information services are offered. The standard service (A$9.95 per month) provides charting, watch screens and quotes while the premium service (A$29.95 per month plus ASX royalties) provides Market Depth, Quotes, Company Research, News Services and Charting. Sanford is the only on-line broker to provide dynamic live information.
Sanford Securities currently has almost 13,000 clients and is growing approx. 15 - 18 % per month.
Averaging about 700 trades per day, Sanford Securities currently represents 1.75% of the overall market.
www.sanford.com.au is Australian's second most popular on-line trading website. It is current ranked 4th most popular financial site (source: www.top100.com.au as of 5th May 1999) and 13th most popular in Australia attracting some 1.25 million hits per day.
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