No quick fix

By Michael Barbera, Chief Product Officer – Trading, Iress

What can we do to ensure Australia continues to have a healthy, resilient stockbroking sector?

It’s fair to say that 2023 hasn’t exactly been kind to Australia’s stockbroking sector.

For one, the ASX has been shrinking for the first time in nearly 20 years thanks to a dearth of new floats and some high-profile private acquisitions. As Citi capital markets advisory chair Tony Osmond told the AFR back in June, businesses are flocking to private investors and “we’re not filling up the bucket with enough IPOs” because “we’ve made listing so hard.”

He added: “You used to list because you needed liquidity and capital. But now because there’s so much private money sitting there, you’ve actually got both.”

Moreover, clients looking for more favourable conditions in other markets are increasingly turning to the full-service offerings provided by global banks, which have international reach and the resources to ensure they’re at the cutting edge of market data and trading tools – giving them a significant competitive advantage over smaller local players.

And if that wasn’t enough, the stockbroking and investment advice industry remains constrained by a regulatory framework primarily designed to address the services and responsibilities of the financial planning sector. While the introduction of an experience pathway will allow professionals with at least 10 years’ experience to bypass some of the most onerous requirements of the post-FASEA education standards, the current regime does very little to encourage new entrants.

For now, anyway, the Government has expressed increased willingness to review this framework. Time will tell how this manifests in actual regulatory change, but this still doesn’t address the market factors discussed at the outset of this piece. What can we do to ensure Australia continues to have a healthy, resilient stockbroking sector?

Perhaps unsurprisingly, this is a question we’ve considered extensively at Iress. As one of Australia’s leading providers of trading and market data software with more than 12,000 institutional, retail and online trader clients, we have significant skin in the game.

This has prompted a thorough re-evaluation of Iress’s existing product suite. Our mission is to build a reliable, robust and innovative order management and trading platform – bringing down barriers to entry for our trading partners and giving them access to a global network. If that sounds ambitious, it’s because it is; it has involved major improvements to our core operating systems, wind-ups of legacy products and the development of multiple market data APIs.

We’re rolling out a cloud-native Iress FIX Hub, which enables frictionless client onboarding, low-touch workflow that dramatically reduces testing, reconciliation and deployment overheads and multi-region cloud infrastructure.

Deployment of Iress FIX Hub addresses one of the key challenges facing many local stockbroking and investment advice businesses: scalability. After all, the volume of data and message flows that traders have to contend with increases in size, storage costs and complexity every. Because of this, it’s essential that the technology supporting your business can auto-scale via high-availability cloud-native infrastructure to provide the frictionless, real-time services clients expect these days.

Iress has a strategic focus on investing in the future of Australia’s stockbroking profession. We want to ensure a healthy future for the industry – one where new participants have access to faster technology with a much lower barrier to entry. Working alongside our broker partners, we believe we can make that happen.

2023 hasn’t been the easiest year for Australian stockbroking, but we want to help you turn it around.

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