What is the future for online stockbrokers? - 26.06.2009
Interactive Investor
This article was written in the wake of Hoodless Brennan selling its execution only business to TD Waterhouse, potentially "casting a shadow over the industry".
However, there was good news for the stockbroking industry, with trading volumes substantially rising in the first quarter. According to ComPeer, the first quarter saw 5.7 million trades by UK retail stockbrokers, up 11% on the previous quarter. Of these, 3.5 million were by execution only firms, an increase of 1.1 million on the equivalent quarter last year, and 400,000 higher than the fourth quarter of 2008. Over 80% of execution only trades are carried out online and activity is up 65.5% year on year. In the current environment, the execution only firms have been able to achieve profit margins of 25%.