Some platforms charge more, leaving Kiwi investors.

Why pay more, when there are better platforms available for less? That’s a simple question that Martin Bottomley, Tiger Fintech (NZ) Limited’s representative, says every Kiwi investor and trader should ask themselves.

“We’ve seen big increases in participation in the capital markets thanks to the sterling work of pioneering platforms, but that participation has come at quite a cost,” he says.

That cost, he says, falls on the very people who are new to investing.

“Warren Buffett famously said ‘price is what you pay, value is what you get’. And I don’t believe a very large proportion of newer investors and traders are getting good value for the price they are paying,” Bottomley continues.

“We invite you to look at the value you’re getting from your preferred platform, particularly when looking at what you’re paying.”

Several online estimates put the number of New Zealand retail investors at around 600,000, although definitive research isn’t readily available. In addition to participation in capital markets including well-known exchanges like the ASX, NYSE and Nasdaq, interest and participation in cryptocurrency trading continues to rise.

Fees can be a contentious issue because several are likely, and there can be some opaqueness about what you’re likely to pay and when. Most New Zealanders start with local dollars, and participation in the New York Stock Exchange or the Nasdaq’s securities, and in crypto markets, generally requires converting your currency into US dollars. That comes with a fee.

If a deposit fee is also charged, it means significant costs may be encountered before purchasing a single share or unit of cryptocurrency. Then there are transaction fees attached to every buy or sell.

Bottomley says these fees are far more of a factor for the trader than they are for the investor. “The distinction is important. Traders make multiple transactions and look for short term asset price movements, while investors hold for the long term and don’t make regular transactions.”

He says for the trader, this immediately makes some platforms completely unsuitable. This is because a trading platform should offer timely, detailed charting, options, and other derivative instruments for hedging, and it should offer some form of support from artificial intelligence agents.

The preferred platform should also offer up-to-date news and analysis, Bottomley says, as well as core information on the listed companies, assets, cryptocurrencies, and access to global markets.

All those features, he adds, should be assessed as a component of value and evaluated against the fees being paid. “If you’re paying high fees and only getting some, or in some cases none of this, it’s time to look closely at value – because you could be getting all of it while also paying far less,” Bottomley states.

“People invest to make money, so it stands to reason that while there are costs and platform providers should be expected to benefit from providing their services, you shouldn’t be coughing up for limited functionality.”

In his view, Kiwi investors and traders are being taken advantage of with deposit fees, currency conversion fees, transaction fees and even withdrawal fees.

He therefore suggests every investor examine the market and assess the fees paid for the service received.

“Tiger believes in offering the most complete platform, which it should be said, is more suitable for more sophisticated investors interested in accessing crypto, derivative instruments including warrants and options. We also believe in offering highly competitive pricing and – here’s the crucial bit – making that pricing as transparent as possible.”

More than that, he says any good provider should offer the opportunity for new investors or traders to get started with ease. “That means a paper trading account; simulating real market trading with virtual money, so you can try your hand at it. That’s something Tiger provides at no cost, which has an educational component, and really helps users understand the exciting and often very rewarding environment of international trading and investing.”

Tiger Fintech (NZ) Limited fees include:

• Buy or sell US shares from just US$2 per trade (up to four free trades per month, T&Cs apply)
• 0.1% of trade value for commission on cryptocurrency trades
• 0.35% NZD⇌USD currency exchange fee
• Free US real-time market data

Try Tiger Trade today with a free paper trading account.

This is not financial advice. Investing/trading carries risks, including the risk of losing an amount in excess of your initial investment. Derivative, leveraged financial product, and virtual asset trading carry a high level of risk and are not suitable for all investors. Simulated environments do not guarantee performance in live trading nor accurately reflect real market conditions, execution/settlement speeds, or trading costs. They are for product analysis purposes only. Please read and understand the Disclosure Statements and Terms and Conditions of Tiger Fintech (NZ) Limited (NZCN: 8187510) at www.tigerbrokers.nz, seek expert advice, and consider whether acquiring or continuing to hold financial products is suitable for you before opening an account or making investment/trading decisions.