Online brokers look abroad to boost offerings

NEW YORK (Reuters) - Charles Schwab Corp , one of the biggest U.S. brokerages, announced on Wednesday a new online platform giving its clients direct access to 12 non-U.S. markets with the ability to trade in their local currencies.

Schwab said it would offer U.S.-based investors commission-free trading on the platform until the end of March, though currency conversion and other fees will still apply.

Separately, Fidelity Investments said on Tuesday it planned to add eight new countries to its online international investing platform by year end, for a total of 25. Investors have the option of settling trades in U.S. dollars or the local currency, from their existing brokerage account.

Trading foreign stocks in their local currencies can offer investors diversification and a hedge against the U.S. dollar, said Brian McDonald, senior vice president of Schwab's active investor services.

It also offers increased access to opportunities outside of the United States, said Howard Chen, an analyst at Credit Suisse in New York.

"If the equity markets are levered to growth expectations as a primary driver, obviously there are many economies outside of the United States that are growing faster than us and the outlook for that growth is faster than us for the next decade," he said.

But there are several risks the average investor should consider, including differences in financial reporting standards and exposure to both market and currency risks, said Greg McBride, senior financial analyst at Bankrate.com in North Palm Beach, Florida.

"Most individual investors are just not cut out to be stock pickers, particularly on foreign exchanges," McBride said. "But the necessity for international allocation means that low-cost ETFs (exchange-traded funds) and index mutual funds are the more suitable option for most individual investors."

San Francisco-based Schwab said its Schwab Global Account is open to all U.S.-based investors and gives access to markets in Australia, Belgium, Canada, Finland, France, Germany, Hong Kong, Italy, Japan, Netherlands, Norway, and the United Kingdom.

Boston-based Fidelity said it planned to add Austria, Denmark, Finland, Greece, Ireland, Poland, South Africa, and Spain to its platform, which it launched in October 2009.

E*Trade Financial Corp offers an online platform for trading stocks in local currencies in six countries - Canada, France, Germany, Hong Kong, Japan, and the United Kingdom - which it launched in February 2007.

The New York-based firm offers its global trading account to U.S. citizens who have separate E*Trade domestic trading accounts, with no minimum balance.

(Reporting By John McCrank; Editing by M.D. Golan and Tim Dobbyn)