Would you suggest SWF participate in a race to the bottom?Is it...

Would you suggest SWF participate in a race to the bottom?

Is it even a good idea for Stake? I'm guessing Stake's motivation is to burn investor money to gain market share, and try to make money later. Or to gain high FOREX spread on USD:AUD conversions for US trades. They raised lots of money lately ($50m+ from memory), because I assume they're burning lots of cash.


There are subsets of customers:

Those who don't care about $60 brokerage on a $50k trade. So they pick Commsec - most feature rich.
Those who feel $9.50 is close enough to nothing, so they pick the low cost platform that they think is best - Selfwealth, Stake, Superhero etc.
Those who only want to spend a couple dollars on brokerage, so pick Stake.

So Selfwealth has a limit - they can't target 'all' customers unless they planned to participate in the race to the bottom.

But if they plan to stay at $9.50, they have to ignore the 'penny pincher' demographic. They're limited to the only semi-budget-conscious customers. So the mid-size portfolio customers. They will gain fewer of the low-size portfolio customers.