Previously Westpac Online Investing customers who held cash investment accounts were charged $24.95. Westpac has reduced the brokerage fee to $19.95 according to a report in the Australian Financial Review.

Additionally, Westpac clients who conduct three or more trades every month, will be eligible for a variable bonus rate of 0.9 per cent, taking the total rate to 5.65 per cent.

Currently, Westpac controls about 10 per cent of the online market, compared with about 50 per cent by Commsec and 18 per cent by E*Trade, according to the AFR.

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The company has not faired well after its business was negatively impacted by bad loans made by its banking division, which reported its seventh consecutive drop in loan loss provisions.

Net charge-offs, or loans that E*Trade doesn’t think it can collect, were $US225 million ($252m), falling 42 per cent from a year ago.

E*Trade gave its earnings a boost by releasing US$60 million from its loan loss as opposed to adding to it, suggesting that the company now believes it has enough capital to cover any impending losses.

The in improvement in the company’s loan portfolio during the second quarter was the difference between E*Trade reporting a profit rather than a loss.

In an interview with Dow Jones Newswires, E*Trade chief executive Steven Freiberg said: “The most significant dollar change (for the company) has been continued improvement in delinquencies and therefore write-offs and provisions in the legacy loan book.”

Mr. Freiberg took the helm at E*Trade  on April 1^st, and given the current state of the U.S. economy says the company would probably experience a continued decline into 2011.

A closely followed metric with E*Trade is its daily average revenue trades (DARTs), which it reported as being 170,000, up ten per cent from the first quarter however still 16 per cent below where it was a year earlier. The broker like its rivals benefitted from the “flash crash” on the U.S stock market in May 6.

Mr. Freiberg said, however, that trading in June was “not anywhere near as robust,” adding that the “residual effects of the flash crash have caused more investors to become concerned”.

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On Thursday, the Sydney based lender launched a new trading platform which it calls Westpac Online Investing. The service aims to provide its 250,000 retail brokerage clients better features including improved access to research, better technical charting tools, and home page customization.

James Staltari head of Westpac Securities says the new trading platform would be a market leader.

“There is no single, online trading platform that provides all the new features and functionality on one platform that we’ve made available to our customers,” Mr Staltari told AAP.

Westpac believes that the upgraded trading platform will generate as much as 8 per cent growth in its brokerage customer base during 2010.

According to Investment Trends, a market analyst, the number of active Australian online traders has leapt 20 per cent since September 2008 and stood at approximately 600,000 by June 2009.

Westpac’s upgrade follows on the heels of rivals Macquarie and CBA’s CommSec, both of which made improvements to their platform last year.

According to Westpac, the lender has seen an increase in the number of customers who traded exchange traded funds (ETF’s), contracts-for-difference (CFD’s), and options last year.

“We saw a decline in CFD activity across the entire marketplace during the financial crisis (in 2008) but those numbers have really rebounded,” he said.

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The sale is apparently not linked to the high profile court case Berndale is currently engaged in. Berndale had launched legal action against prominent investor David Waterhouse who failed to pay margin calls for an Opes Prime trading account.

The decision by Merrill to sell Berndale will have implications on smaller stock brokers who are now required to either close, merge or outsource trade clearing to a third parties like Berndale. Previously those type of firms used the ASX clearing house ACH.

Currently ASX stipulates that settlement of trades must occur through the Australian Clearing House (ACH), with the ACH now proposing more stringent liquidity requirements.

The proposed regulation is to give the ACH the ability to deal only with brokers with enough financial muscle to settle all outstanding trades. The ACH wants smaller brokers to pass on settlement risk to third parties who have the ability to settle all trades. Opes Prime for example used Berndale as a third party house to clear its trades.

Merrill Lynch acquired Berndale as a legacy unit, when it purchased Mcintosh Securities back in 1996. Berndale was initially only a nominee company that institutional investors used to hold their stock in return for a small fee. Since then, it has expanded rapidly and provides full service back office functions including both stock clearing and lending.

Industry analysts point out that if Berndale were to cease serving clients, the number of firms which offer clearing services would be reduced significantly, which would reduce the amount of counterparties, increase fees and the risk that transactions fail.

Smaller stock brokers wishing to avoid having to increase their core capital to $5 million by the end of the year, and $10 million beyond that, will have to outsource clearing and settlement to third parties.

The Reserve Bank of Australia recently issued a report recently which said that of the 57 existing market participants (brokers) 17 would be affected by the change in regulation whilst 10 of them had liquid capital of less than $5 million.

Merrill Lynch is large enough to clear its own trades and as part of its merger with Bank of America is required to sell off non core assets. Interested bidders may include Fortis which provides clearing for both cash equities and futures, UBS, ETrade, Citigroup and Macquarie.

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It’s easy to be sceptical, Niall Ferguson the acclaimed author of “The Ascent of Money” and Harvard University professor, reminds us that there were a number of rallies in between 1929 and 1933, the year the Great Depression finally ended. The fact of the matter is if you take a ten year view, then these valuations are probably going to be decent, even if they do not represent the absolute bottom. We all know the earlier we invest the better it is for our financial future.

If you are thinking about playing the equities game, and want to get your toes wet in equities trading, Money-AU has two on-line trading platforms that are very easy to use and have some great introductory offers.

St George’s directshares allows newly minted traders up to 25 free trades to get started with, it provides a sophisticated platform with real time prices and in depth research, allowing the individual to trade equities, warrants and options, with St. George providing financing for traders wishing to engage in margin trading.

E*TRADE Australia is another great trading platform, which has many of the same features, from real time prices, to charting tools which give the technical trader an edge. E*TRADE also has multiple research partners allowing traders to look at an equity from many different viewpoints. For the new account E*TRADE Australia is offering up to $550 in free commissions.

It’s never too early or late to get started investing.

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IG Markets Chief Executive Tamas Szabo said that his companies trading in CFD’s in Australia in the six months ending at the start of December was double the volume it was in the same period year on year. Mr. Szabo went onto add that account numbers were up 65 per cent and said,

“Client uptake is very healthy and we haven’t had any reduction in client balances, so our clients seem fairly resilient, People are losing a bit of faith in traditional fund managers and in giving their money to somebody else to handle.”

Contracts For Difference allow investors to speculate on the direction of financial assets, everything from exchange rates equities, their indexes or commodity prices. The instruments allow investors to wager whether the prices of these assets, will move up or down without actually owning the underlying, and provide the speculator with as much as 95 per cent leverage, greatly magnifying any losses or gains.

Mr. Szabo reckons that the global financial crisis and the resulting high degrees of volatility has not scared away potential customers in fact suggesting quite the opposite has occurred, crediting the crisis with  creating a new pool of customers.

“If someone loses their job they have more time on their hands, and they see this as a money-making activity, so we’re seeing more of the day-trading type of client in the current climate,” he said.

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The agreement is in actual fact between two Westpac Banking Corp subsidiaries, and a CBA unit. Westpac subsidiaries, Westpac Securities Ltd and BT Portfolio Services Ltd, did signed a deal with CBA unit Australia Investment Exchange Ltd, which is part of its brokerage division CommSec.

CommSec managing director Matt Comyn said CBA was committed to becoming the leading provider of wholesale financial services in Australia.

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If you can stomach a roller coaster in the short and medium term, then it’s worth thinking about a punt. Perhaps the easiest way I can think of buying Australian stocks is through an online broker like St George’s directshares. They are my broker of choice, just because it was so easy to set up an account with them, If you already have a Power Saver bank account with St George like I did, then setting up a St. George’s directshares trading account is a complete doddle. Here is my logic though, and in large part I have plagiarised from the Sage of Omaha, because he is the world’s greatest investor and I am sure he uses a St. George’s directshares trading account when he buys a few billion dollars of equities!!!

The ASX has been correcting for the last 9 months almost solidly. Just like every other equity market in every other country in the world has. In fact year to date has been pretty grim, if you first bought into the market in January when the ASX hit a high of 6691. The Index has since climbed down from its highs and dropped over 2500 points this year, with a loss of about 40%. I feel the pain of anyone who made that trade.

One doesn’t need to be reminded just how bad the news is, everyone has suffered to some degree. The credit crisis story, well it’s getting very old pretty quickly. The crisis first started a couple of years ago with HSBC declaring a profits warning, which it never does, and then it kicked into overdrive about 14 months ago when two Bear Stearns hedge funds began imploding, and markets have been unwinding ever since. Frankly I am a little bored with the whole theme.

When a market corrects 40-50% in the space of a couple months does that mean that the companies that form the index are now half as valuable as they were a year ago? Have things changed so much, that profits, revenues and growth prospects are all going to be half what they were a year before? That seems rather unlikely to me.

NAB reported full year earnings at the end of last month and it has seen a drop of some 11% for the year, CBA reported just a couple of weeks ago and posted a 12% gain in its yearly profits, though both are cautious about future performance. Now obviously equities price in the future profits. But one has to wonder whether it is fear that is driving the markets rather than the fundamental notion that future profits should drive equity prices and their valuations.

The point being made is this. These kind of sell off’s in equities, well they are once in a lifetime opportunities you see. Opportunities to buy shares in solid companies at decent valuations. Forget about mutual funds and diversifying your risk for the moment, or all of the other malarky that people usually talk about when investing. Those rules do not apply in troubled times such as these. Everything has corrected simultaneously.

In this kind of situation investing is a lot more basic than the principles of correlation coefficients, standard deviations and individual stock beta’s. Statistical analysis of historical returns, well they go out the window in times like these, and in fact that is a large reason why people have been so badly burned. The models sophisticated investors were using became useless when the markets were at their most stressed. Historical returns were not able to accurately model what actually occurred in financial markets during the months of September and October 2008

The story now is the most simple it will ever be, Mr. Buffet in my view has it down. Be fearful when everyone is greedy he says, and be greedy when everyone is fearful, and I couldn’t agree with him more. It will never get easier than this. Though stocks may indeed become cheaper in the short run, there are going to be companies with great prospects in spite of an impending recession, companies that have been oversold, there just are, because everyone is selling everything at the same time right now, or were at the start of last week anyway. If that is the case, then obviously there are some good buys out there, provided you’re willing to wager for the long haul and for the long haul only.

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