How to Choose an Investing App in Australia
The three types of investing app, what to compare, CHESS vs custodial ownership, fees, and how to check an app is ASIC-regulated. Australia, 2024-25.
By Timothy Hirou GaschereauPublished 10 min read
Try it yourself
The number of investing apps available to Australians has exploded, which sounds great until you're staring at 15 options all claiming to be the best. This guide cuts through the noise: the three types of investing app, what to actually compare, and the mistakes that catch beginners out. It's part of our compare and choose series, and it's general information only, not financial advice.
🎯 The essential: There are three main types: full brokers, micro-investing apps, and robo-advisers, and they suit very different investors. Fees matter more than they look ($10 brokerage on a $500 trade is 2% before you've made a cent). Always check the app holds an ASIC-issued AFSL, and know whether you're getting CHESS-sponsored or custodial ownership.
The three types of investing app in Australia
Before you compare fees or features, know which category you're shopping in.
- Full brokers / share trading apps let you buy and sell shares and ETFs directly on the ASX or international markets. You place a trade, you own the investment, usually for a brokerage fee per trade. Right for building your own portfolio and picking your own ETFs.
- Micro-investing and round-up apps lower the barrier to entry with small regular contributions or by rounding up purchases and investing the spare change. You usually don't pick individual shares; the app uses a pre-built portfolio. Watch that fees aren't disproportionate on small balances.
- Robo-advisers sit between a full broker and a financial adviser: you answer a short risk questionnaire and the app builds and rebalances a diversified ETF portfolio for you. Good for a hands-off approach without full adviser fees.
The three app types compared
| App type | Pros | Cons | Who it suits |
|---|---|---|---|
| Full broker | Full control, CHESS often available, wide market access | Needs more knowledge, brokerage per trade | DIY investors who pick their own investments |
| Micro-investing app | Very low minimum, easy to start, builds the habit | Less control, fees high relative to small balances | Complete beginners building the savings habit |
| Robo-adviser | Hands-off, auto-rebalancing, diversified from day one | Less control, management fee on top of ETF fees | Investors who want set-and-forget |
What to compare when choosing an investing app
Once you know your category, here's what to look at.
- Brokerage and account fees. Brokerage ranges from $0 to $20+ per trade; some apps also charge monthly account fees. $10 on a $500 trade is a 2% cost before your money moves. Match your trade size to the fee structure.
- CHESS-sponsored vs custodial ownership (covered below). It affects who legally owns your shares.
- Markets and ETFs available. Some brokers are ASX-only; others add US and international markets. Check specific ETFs (like VAS or VGS) are available before opening an account.
- Minimum investment. The ASX minimum marketable parcel is $500 for most securities, but fractional-share and micro-investing apps let you start from $1.
- Ease of use. Check recent App Store and Google Play reviews for reliability and support. A clean interface beats a feature list you'll never use.
- DRP and tax reporting. A Dividend Reinvestment Plan auto-compounds your dividends; and a platform that produces a clean annual tax report (or integrates with Sharesight) saves real pain at EOFY.
CHESS-sponsored vs custodial ownership
This confuses a lot of people but it matters. CHESS sponsorship means the ASX's system records you as the legal owner: you get your own Holder Identification Number (HIN) and your holdings are in your name, so if the broker collapsed your shares are still yours and transferable. Custodial ownership means the platform holds your shares on your behalf; you have a beneficial interest and the assets sit in a separate trust, but accessing them if the platform failed would be more complex.
Neither is inherently unsafe, but if CHESS sponsorship matters to you (especially for a large portfolio), check explicitly before signing up. Not all platforms offer it.
Is it ASIC-regulated? How to check
This is non-negotiable. Any platform offering financial services in Australia must hold an Australian Financial Services Licence (AFSL) issued by ASIC. To check, search the company name on ASIC Connect's Professional Registers and confirm they hold a current AFSL covering the services offered.
Red flags: no AFSL listed anywhere, registered only offshore, pressure to deposit quickly, and promises of guaranteed returns. If an app can't show you a current AFSL, walk away.
Five things people get wrong when picking an investing app
- Chasing sign-up bonuses. Free trades and cash bonuses are marketing. The right platform for your style is worth far more than $20 in free brokerage.
- Ignoring fees on small amounts. $10 on a $500 trade is 2%, and it compounds into a real drag over time.
- Assuming custodial means unsafe. Custodial platforms are legal and regulated; choose a reputable, ASIC-licensed one.
- Picking the most feature-rich app as a beginner. Options trading and margin lending are overwhelming if you just want ETFs. Start simple.
- Skipping security setup. Enable two-factor authentication and use a strong, unique password. It's a financial account.
How fees quietly eat your returns
Say two investors both put $500 a month into the same ETF returning 8% a year for 10 years. Investor A pays $10 brokerage per trade ($120/year); Investor B pays $3 ($36/year). That $7/month difference, invested at 8%, would be worth around $1,280 after 10 years. Not a fortune, but real money, and the gap widens on larger portfolios and more frequent trading.
The point isn't that cheaper is always better, it's that fees are a guaranteed cost in a world where returns are not. Every dollar in fees is a dollar that doesn't compound. See the long-run drag with our fees calculator. The bottom line: pick your category first, verify the AFSL, weigh fees against the features you'll actually use, and don't chase bonuses. Then just start, using our guide on how to start investing.
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❓ Frequently asked questions
Is it safe to invest through an app?
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Yes, provided the app holds a current AFSL issued by ASIC. Regulated platforms are required to hold client funds separately from their own and comply with Australian financial services laws. Always verify the AFSL before depositing.
Should beginners choose CHESS-sponsored or custodial?
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Both are fine for beginners. CHESS sponsorship gives you direct legal ownership and makes it easier to transfer holdings if you switch brokers later. Custodial platforms are also legal and regulated. If you're just starting and the platform is reputable and ASIC-licensed, don't let this decision stop you from beginning.
How much do I need to start investing through an app?
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It depends on the type. Micro-investing apps let you start with as little as $1. Full brokers on the ASX typically require a minimum parcel of $500 per trade (an ASX rule). Some platforms offer fractional shares, which lets you invest smaller amounts in higher-priced securities.
Do investing apps handle tax reporting?
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Some do, some don't. Better platforms produce an annual tax report or integrate with portfolio tracking tools like Sharesight. Others give you a transaction history and leave the rest to you. Check this before you sign up, especially if you plan to trade regularly or receive dividends.
What happens if my investing app shuts down?
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If you're CHESS-sponsored, your shares are registered in your name with the ASX and aren't affected by the platform's financial situation. If you're on a custodial model, your assets should be held in a separate trust, but accessing them may take longer. Either way, ASIC-regulated platforms have obligations around client asset protection, another reason to stick to AFSL-licensed providers.
Can I use more than one investing app?
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Yes. Many investors use a full broker for their core ETF portfolio and a micro-investing app to build the habit of regular contributions. Just be aware that managing tax across multiple platforms adds complexity at EOFY.
📚 Recommended reading
The Barefoot Investor
Scott Pape
The Barefoot Investor
Scott Pape
Australia's best-selling money book ever. A simple system for accounts, budgeting, debt and a real emergency fund in one.
The Simple Path to Wealth
JL Collins
The Simple Path to Wealth
JL Collins
The friendliest on-ramp to index investing there is, born from letters a dad wrote his daughter. It makes 'buy the whole market and chill' feel obvious, just map his US fund picks onto Aussie equivalents and super.
The Quick-Start Guide to Investing
Glen James & Nick Bradley
The Quick-Start Guide to Investing
Glen James & Nick Bradley
A short, friendly runway from never invested to confidently buying shares and ETFs, tuned for Aussie beginners. Great if Sort Your Money Out left you keen to go deeper.
Some links above are affiliate links. If you buy through them, Snowball Invest may earn a small commission at no extra cost to you. We only recommend books we'd suggest anyway.
Sources
This article is general information only and does not constitute financial advice. Fees, features and ownership models vary by platform and change over time. Consider your own circumstances and verify any provider's AFSL before investing.
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Timothy Hirou Gaschereau
Founder of Snowball Invest, not a financial adviser.
I write about what I'm learning myself, because nobody ever taught us how to take control of our own money. It's a skill, not a mystery, and it's never too late to learn it. The best day to start was yesterday, the second best is today.
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