UK private client brokers and investment managers mark time - 13.07.2006
Wealthnet, 13/02/2006, Ian Orton
UK private investors did not appear to participate in the December equity market rally, according to the latest data released by ComPeer, a London-based research and consultancy firm that focuses on the private client stockbroking and investment management sector.
Bargain volumes transacted by market firms fell by 2.60 percent during the last quarter of 2005, with the APCIMS/ComPeer Index falling to 179 (Q4 1991 = 100). ComPeer recorded 3.23 million trades transacted during the quarter, down from 3.33 million on the previous quarter.
Daily volumes remained at around the 40,000 level as they have done for the past three quarters. However, volumes approached 50,000 per day during January, echoing similar patterns apparent in the first quarter of 2004 and 2005.
ComPeer says that revenue levels also remained relatively constant in the fourth quarter for all three business peer groups it covers, execution only brokers, advisory brokers and discretionary investment managers.
It estimates that discretionary managers generated £201.17 million of revenue during Q4 compared with £199.73 million in the previous quarter. Advisory brokers generated £55.73 million compared with £56.55 million. And execution only brokers netted £63.92 million, compared with £64.04 million.
ComPeer expects revenues to increase by 16 percent during Q1 2006, based on current and historical trends.
Employment trends have remained relatively static over the past two years. Discretionary managers, advisory and execution-only brokers had 6,706, 2,660 and 3,223 employees at the end of 2005 compared with 6.973.2.482 and 3,235 respectively at the beginning of 2004.
Assets under management and administration for private clients increased from £152 billion to £159 billion during the quarter.
All the business peer groups continued to improve margins during the quarter says ComPeer. Discretionary managers had the best margins at around 25 percent followed by execution-only (circa 12.5 percent) and advisory (13 percent).