Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

How wealth managers' profits have fared during the squeeze

How wealth managers' profits have fared during the squeeze

Wealth managers and execution-only stockbrokers have managed to maintain profit margins during the squeeze, according to Compeer's third quarter update.

Rather than being clipped, Compeer said wealth managers typically increased their pre-tax profit margins by 28.6%, while execution only stockbrokers saw a 43.6% rise.

This is on the back of quarter-on-quarter revenue growth, Compeer said, while the value of assets in the sector hit a new high of £515 billion.

But while assets trended upwards, trading volumes tailed off during the last three months, a trend now in its second consecutive quarter.

According to the latest data trading volumes fell from 4.71 million to 4.53 million, with collectives, CFDs and spreadbets all clocking up double-digit falls.

The Apcims Compeer Index, which tracks private client activity on the London Stock Exchange, also fell, though the drop was more marginal, from 193 to 191.

Fixed income still popular 

Compeer's quarterly update also looked at asset allocation trends within the sector.  It found that fixed income has remained a top choice for investors - a view backed by the Wealth Manager Quarterly survey - despite value making the investment case for equities look more compelling than credit.

Over the stretch looked at by Compeer the value of UK fixed interest purchases was £998 million, more than three times the value of sells.

UK equities were the most traded, though purchase content fell from 51% to 47% during 2012's third quarter, reflecting investors' cautious mood.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Dispelling the sustainable investing myths

Dispelling the sustainable investing myths

There's a bit of a buzz around sustainable investing at the moment. We speak to three wealth managers to find out what they think.

Play Inside ETFs: positioning for the Fed rate rise

Inside ETFs: positioning for the Fed rate rise

Natalie Fast discusses how investors are using ETFs to position for a rate rise with guests Irene Bauer from Twenty20  Investments and Markit's Simon Colvin.

Play Wealth Manager Retreat: video highlights

Wealth Manager Retreat: video highlights

The UK's leading wealth management talent gathered at our annual event at the Grove celebrate the best in private client portfolio management.

Wealth Manager on Twitter