CMC Markets Review Australia: Pros, Cons, Fees & Verdict

On paper, CMC Markets is an insanely attractive option for retail investors. It has scooped up tonnes of awards across several categories, and its commissions on trades are undeniably impressive.

However, before jumping through all the administrative hoops to set up a trading account, you should know CMC Markets has several significant limitations.

Most people don’t realise that CMC Markets includes two completely separate products:

I’ll do my best to cover both of these products in this review.

Above: CMC Markets insists that you set up either a CFD or an equity trading account.

Separating the two products is a smart move by CMC – after eToro was sued by ASIC for bundling derivative and equity trading into one product.

Pros:

Cons:

Above: The CMC Invest desktop interface is pretty good – but nothing to write home about. It looks like something that belongs in 2020.

CMC Markets At A Glance.

Is CMC Markets Good For Beginners?

I’m assuming beginners won’t be using the CMC Markets CFD trading platform – because that’d be playing with fire.

But CMC Invest is a pretty good tool for beginner investors – especially those planning to stick to the ASX.

They simply asked for the licence number, which they instantly verified via API with some government department – probably ASIO. Ha.

It took all of 10 seconds.

Above: The stock heatmap by TradingView is a nice touch.

This might seem like a trivial detail, but I appreciated not having to send out an image of my licence out unnecessarily.

The daily cap prevents day traders from abusing this feature, but lets buy-and-hold investors build out their ASX portfolios without paying commissions.

Brilliant.

But the fees on US stocks are more problematic.

(Related: CMC Markets vs eToro: Which Is Best For Aussies?)

The $0 unlimited brokerage looks like a great deal on the surface – because you could, theoretically, invest a million bucks on the NASDAQ – and not pay a cent in commissions.

But the flat 0.6% currency conversion fee is the silent killer here. You’ll get a much better deal with eToro FX fees, which you can discount to zero.

Is CMC Markets Good For Expert Traders?

Sort of.

CFD traders will find CMC Markets attractive. It is an advanced tool for people who want to speculate on derivatives, with up to 30X leverage.

But in my comparison with other CFD platforms, it didn’t come out on top – Pepperstone did.

The Next Generation platform features a whopping selection of 12,000 financial assets.

My favourite is the “Breakout and Emerging Patterns” tool, which auto-adjusts when the chart timescale is changed.

You’ll pay it on the way in – and on the way out, creating an effective 1.2% drag on your US investments.

To make things worse, CMC Invest doesn’t offer you a standalone USD currency account. Any sale of US equities will automatically convert to AUD.

Above: The CMC Markets CFD trading platform is exactly what you’d expect – customisable, powerful, but agricultural-looking.

If you sell, for example, Google to buy Microsoft, you’ll have to pay 2 X 0.6% FX conversion fees:

And if you decide to simply sell Google and wait for a good time to buy Microsoft, you’re exposing yourself to currency risk.

(Related: Best Automated Trading Platforms In Australia).

If the Aussie dollar strengthened by 10% during the period you held Google shares, your capital gains will be reduced by 10% – because the platform won’t let you hold USD.

Your dividend payments will face the same issue.

Is CMC Markets Safe?

CMC Markets is regulated by five tier-1 regulators (high trust) and one tier-2 regulator (average trust).

Some tier-1 regulators include the Australian Securities & Investments Commission (ASIC) and the New Zealand Financial Markets Authority (FMA). Here are a few reasons why CMC Markets is regarded as one of the most trustworthy platforms:

(Related: How To Buy Tesla [TSLA] Stocks).

1. Segregated Accounts.

CMC Markets is required by law to segregate client money from CMC’s own.

So, your money won’t be affected if the company finds itself in financial turmoil.

2. ASIC License.

When trading an asset on any platform in Australia, the most important legal requirement is that they are licensed and regulated by the ASIC.

3. Financial Control.

Never leave yourself exposed to volatility, and be sure to make use of the financial controls. You have stop losses, trailing stop losses, guaranteed stop losses, and others available at your disposal.

Frequently Asked Questions About CMC Markets.

Potential CMC Markets clients often ask these questions about trading costs, trading tools and account types.

What Is CMC Markets Invest?

CMC Markets Invest is the company’s standard product for retail traders and investors. With an Invest account, you can trade in Australian and international markets. 

What are the ASIC changes?

On 29 March 2021, the Australian Securities & Investments Commission (ASIC) introduced rules regarding how investors can trade CFDs.

These changes were designed to protect Australian investors and ensure a fairer and stronger financial system for all.

The new rules introduce:

Can You Use CMC Markets In Australia?

Of course. To be clear, even though it’s a UK-based financial services provider, CMC Markets’ Australian branch enables you to execute trades with the lowest brokerage prices in Australia.

What Other Countries Can I Trade In On CMC Markets?

Here is a list of countries that CMC Markets allows you to trade in:

Can I Transfer My Assets To CMC Markets If I Have A HIN With Another Broker?

Yes! And it’s much simpler than you might think. You just need to complete the ASX Transfer CHESS Holdings form (and the International Broker to Broker form, if applicable). You may also need to verify your identity with your broker before proceeding.

What Are Price Adjustments?

CMC Markets and any other brokers for CFD traders make adjustments on the relevant listed CFD on the ex-date or the date of the corporate action, such as dividend payments or shares splitting.

These adjustments maintain the fair value of the contract for both buyers and sellers.

Is CMC Markets Any Good?

It’s pretty good, but not without issues.

I’d choose it if I was a risk-averse, defensive equity investor who played mostly on the ASX. Its fee structure is almost unbeatable here, and CHESS is a nice perk.

But I’m almost entirely the opposite type of animal.

This is why I prefer eToro, which allows me to bypass its FX fees. Or Interactive Brokers, which has almost nonexistent FX fees to start with.

And if I was a CFD trader – which I’m not – I’d stick with a dedicated CFD trading platform like Pepperstone.

Tommy