BRITAIN is racing to invest in the stock market, a trend that has seen savings surge and boosted profits at stock brokers.
Today AJ Bell said revenues for the year jumped 21% to £127 million, with profits up 29% to £49 million. That allows for a 28% increase in the final dividend to 6.15p, a result for chief executive and 23% shareholder Andy Bell.
He notes “high levels of new customers and record dealing”, as locked down Brits played the stock market, many of them for the first time. There is a new breed of younger investor, brokers note.
The FTSE 100 is up almost 1500 points since the low of March 23 this year when it fell to 4999. Today it started at 6464, which means £440 billion worth have been added to big shares. In November alone, stocks rallied around 700 points as positive news on vaccines saw optimism about the future for the economy.
Across the year, the FTSE all share index is still down by 19%. Yet AJ Bell still saw assets under administration rise 8% to £56.5 billion.
Bell puts that down to new customers and an increased brand awareness of AJ Bell since it floated in December 2018.
Bell says there are three types of new customers – the confident and controlled, hungry for help and nervous newcomers. There are more of the last two putting money into shares and funds than before, he says.
AJ Bell’s arch rival is Hargreaves Lansdown, which has also seen a surge in new customers opening accounts.