Half a million share investing clients taken over by CMC Markets (CMC) in an AUD$25 million ($18.18 million) deal will likely benefit from lower brokerage charges in five major markets.
CMC, a leading global provider of online trading and institutional platform solutions, has obtained a client base from Australia and New Zealand Banking Group (ANZ) for a sum of AUD$25 million ($18.18 million). The transaction announced today (October 4) is funded by CMC’s existing cash resources.
Over 500,000 share investing clients involved in the deal have total assets of more than AUD$45 billion ($32.82 billion). The transition of the client base is expected to fully complete in 12 to 18 months.
Following the transition, the share investing clients will benefit from lower brokerage charges across four major international markets and the local Australian market. They will also enjoy a wide range of additional benefits currently unavailable with ANZ, including access to enhanced, market-leading mobile apps and complementary education tools and resources.
On the other hand, the transaction gives CMC the opportunity to drive greater value from its enlarged client base. It marks another significant step in the ongoing diversification of its business in Australia and across the globe, particularly at a time when it is seeing elevated demand for retail stockbroking services.
It also further establishes CMC as a financial technology leader in the Australian market and removes the uncertainty around the finite term of the existing ANZ white label partnership.
The white label technology partnership, where CMC’s trading technology has powered ANZ’s share investing business since 2018, will come to an end as this transaction comes into effect. The partnership generated £39.5 million ($54.13 million) in net trading revenue for CMC in financial year 2021.
“This transaction is part of our strategy to create a non-leveraged investment platform and forms part of our longer-term goals for the company, said Lord Cruddas, chief executive of CMC.
“As this new venture expands and develops, we will be able to offer more products, including third-party funds and tax wrappers, directly to our clients. This is a further step towards the diversification of CMC’s earnings and complements the launch of our new investment platform in the UK, aligning our business strategy across our core geographies,” Cruddas said.
“I would like to take this opportunity to extend a warm welcome to our new share investing clients, and also thank our colleagues at ANZ Bank, with whom we have worked closely over the last three years to put clients’ needs first,” he said.