ASIC warns retail investors of risks from online brokers

The Australian Securities and Investments Commission (ASIC) has issued a warning to retail investors regarding online brokers that target novices with high-risk, complex financial products. A surveillance review conducted between March and June 2026 examined nine entities offering products such as short-dated exchange traded options (ETOs), futures, and fractional shares.

ASIC found that some providers use incentives like fee-free trading, cash vouchers, or airline reward points to encourage trading. The regulator noted that these incentives can distract from significant risks, such as the use of leverage in derivatives, which can lead to substantial losses within hours. Additionally, fractional shares were identified as having complex ownership arrangements that may impact investor protections.

Following the investigation, one broker has exited the Australian market, two have ceased offering certain high-risk products, and five have implemented changes to their practices. ASIC Commissioner Simone Constant emphasized that investors should only engage with products they fully understand, noting that ‘there is no such thing as easy money’.