A good start to the year for most firms

Although there has only been a small improvement in the market (as indicated by the 0.23% increase in the FTSE APCIMS Balanced Index), the first quarter of 2011 has shown good results for the majority of firms in the Wealth Management industry.

Despite lower volatility in the market, Execution Only Stockbrokers continued to record exceptional trading volumes, in particular the cash market on the LSE and PLUS. 4.42 million trades in total were transacted on behalf of self-investors, of which 3.52 million were UK cash market trades. These figures surpassed the high volumes during the market low of 2009, and came within 9% of the volumes recorded at the height of the dot-com boom. With rising commission income, pre-tax profit margin remained very healthy at 29.6%.

Similarly, commission income has grown steadily for Wealth Managers, up 4% compared to Q4 2010. Investment Assets grew ever closer to the £400bn mark for these firms (up 1.2% to £395bn), although is yet to be reflected in a rise in investment management fees. As a sign of expansion, staff numbers increased by 3.6% quarter on quarter, the highest quarterly percentage increase in the last two years. However, Wealth Managers have maintained good cost control, only rising by 1% and allowing pre-tax profit margin to rise for the second consecutive quarter to 25.5%.