Sharedealing - UK - September 2010
The year 2009 was a much better one for stockbrokers, as it was for the whole retail investment industry. Demand for shares (and funds) picked up strongly during the year, with total trades transacted by stockbrokers up by around two fifths on 2008. Assets under management increased by more than a quarter, reflecting an improvement in global stock markets and renewed investor confidence.
However, during 2010 a fresh wave of volatility and uncertainty has set in. The recovery in the UK stock market that began in March 2009 ended in April 2010. During Q2 2010, equity prices tumbled, due to heightened concerns over sovereign debt levels in the eurozone and global growth prospects. Fears of a double-dip recession hitting the US and recent signs of softness in Asian economies have also unsettled investor nerves.
- There has been a shift towards investment DIY, reflected by the increase in client numbers of execution-only stockbrokers in 2009.
- The markets may be volatile, but retail activity picked up strongly in 2009 and this growth was maintained in 2010.
- Over the last two to three years, the trading behaviour of retail clients has become increasingly sophisticated, as clients have more confidence investing at lower share prices, and selling higher to book short-term profits.
- iPhone, and more recently the iPad, have established themselves as ‘devices of choice’ when it comes to mobile sharedealing services, whilst expectations grow as to the possible impact of Android. Trade sources see mobile services maturing at a rapid rate.
- Just under one in ten (9%) plan to increase their equity-based holdings (eg by buying shares or funds). This is three times the proportion (3%) who plan to decrease their holdings (eg by selling shares or funds).
- There is significant scope to grow penetration of sharedealing accounts, with just over half (54%) of those with savings or investments expressing interest in online execution-only sharedealing sites.
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