Abstract
Overview
Introduction
Stockbroking in the UK has witnessed dramatic changes in the past five years. Record stock market performance followed by dramatic declines has driven radical shifts in investor activity. These turbulent markets have also had important implications on the success of the execution-only business model.
Scope
- Sizes and forecasts UK retail direct equity holdings from 2002-11
- Assesses demographic share ownership within the UK
- Offers detailed competitor assessment
- Comprehensively assesses contracts for difference and spread betting
Report Highlights
The retail equity market continues to recover in 2007, but Datamonitor predicts a market downturn within the next 5 years.
Online distribution is the future of retail trading, and the majority of trading now takes place online, where competition is increasing rapidly.
CFDs and Spread-betting are a strong market and are reaching maturity in the UK. Regulatory measure such as MiFID have set the scene for a strong potential sales opportunity both in Europe and globally.
Reasons to Purchase
- Be prepared for the future - obtain detailed data and forecasts for the the UK retail equity market from 2002 to 2011.
- Assess the competition - gain insight into the leading online players, including comprehensive profiles of the top online retail equity distributors.
- Explore trends including growth of competing products, fees and commissions, regulatory changes, online stockbroking and competition.
Table of Contents
- Overview
- Catalyst
- Summary
- Executive Summary
- Market Context
- Distribution Dynamics
- Table of Contents
- Table of figures
- Table of tables
- Market Context
- The retail direct equity market continues to recover
- However, equity is growing at a slower rate to the total retail asset market due to investor interest in alternative asset classes
- Domestic retail investors account for less than 20% of the total domestic equity market flow
- Total retail equity balances reached £435 billion in 2006, with quoted shares accounting for around 62%
- Both capital appreciation and net inflows declined between 2005 and 2006
- Equity performance has been boosted by the steady recovery of the FTSE 100 index from its low point in 2003 to a 5 year high in April 2006
- Individual share ownership has fallen across the board since 2002
- The level of direct equity ownership remains highest in the South of England
- 55-64 year olds remain the most likely individuals to maintain equity
holdings
- All age groups have decreased their equity holdings since 2004-2005, excepting the static 85+ age band
- Males are more likely to hold equity than females by approximately 3%
- Individual share ownership has fallen across every income band since
2004-2005
- There remains a strong correlation between wealth and equity investment
- Datamonitor predicts a collapse in the retail equity market around 2008
- The UK retail equity market is predicted to see a significant downturn
between 2008-2009 before recovering in 2010
- In the UK
- In the US
- General
- The UK retail equity market is predicted to see a significant downturn
between 2008-2009 before recovering in 2010
- Key equity products include spread-bets and CFDs
- Spread-betting
- Spread betting offers some significant investment advantages to traditional equity
- Contracts for Difference
- Market Conditions are positive for derivatives
- Spread-betting
- Regulation
- Execution-only direct equity trading is unlikely to be significantly impaired by MiFID
- MiFID is likely to have a positive effect on sales of CFDs
- ...However, MiFID may also increase administration costs and lose investors
- There have been rumours of a removal of stamp duty on share
transactions
- Some regard stamp duty as unsustainable
- ...While some believe its tax revenue to be politically irreplaceable
- The retail direct equity market continues to recover
- Distribution Dynamics
- Online distribution is the future of equities trading
- Growth in online trading is linked to increased confidence in the
stock market
- Levels of growth may be unsustainable
- Investors are more sophisticated than ever before
- Online trading is easier and cheaper for both brokers and investors
- Online trade pricing has a number of common features and advantages
- Online trading has had some notable disadvantages
- Growth in online trading is linked to increased confidence in the
stock market
- Developing the online trading industry is vital
- Nominee accounts are the future after government legislation in 2006
- Personal CREST accounts were growing in popularity, but have fallen behind
- Dematerialization suggests the creation of an electronic compromise
- Profiles of leading online providers suggest strong competition
- Hoodless Brennan is the best-value UK online share dealer
- The Share Centre targets a broad range of investor groups
- Hargreaves Lansdowne offers a wide product range
- Spread-betting and CFDs have developed into an online phenomenon in
Britain
- Education is the key
- The customer base for spread bets has expanded
- The UK market looks set to grow for spread bets and CFDs
- The distribution model must develop if the market is to continue to expand
- Online distribution is the future of equities trading
- APPENDIX
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Balance of retail assets held in direct equity, 2002-2006
- Table 2: Direct investment in domestic equity markets flows, 2002-2006
- Table 3: UK retail equity balances by cBreakdown of UK retail direct equity balancBreakdown of UK retail direct equity balances and net inflows, 2002-2006
- Table 4: Breakdown of UK retail direct equity balances and net inflows, 2002-2006
- Table 5: FTSE 100 historical prices 2002-2006
- Table 6: Level of direct equity ownership among UK households, 2002-2006
- Table 7: Age range of UK adults holding equity, 2002-2006
- Table 8: Proportion of males/females in each age band with shares, 2005/06
- Table 9: Proportion of households in each total weekly income bracket with shares, 2002-2006
- Table 10: Retail Equity Market Forecast, 2007-2011
- Table 11: A selection of leading UK online share dealers
- List of Figures
- Figure 1: The UK retail equity market has grown by over 10% since 2002
- Figure 2: Domestic retail investment is growing at a similar pace to non-retail and foreign investment
- Figure 3: Unquoted shares are seeing negative growth compared to strong increases in quoted share balances since 2002
- Figure 4: Breakdown of UK retail direct equity balances and net inflows
- Figure 5: FTSE 100 prices have risen steadily since 2003, breaking the 6,000 point barrier in April 2006
- Figure 6: The South East saw the strongest growth in share ownership between 2005-2006
- Figure 7: UK adults aged 55 to 64 maintain the most equity holdings in the UK
- Figure 8: Males between 55 and 59 are the most likely group to hold equity in the UK
- Figure 9: Households with an income of over £1,000/wk are the most likely to own equity in the UK
- Figure 10: The retail equity market in the UK will decline by an average of 3% between 2007 and 2011
