APCIMS today released the ninth annual survey of private client investment, which paints a mixed pict...
The survey, compiled by ComPeer using data from 87 APCIMS firms, the London Stock Exchange and settlement system operator Crest showed that investors relying on APCIMS members lost 6% of the value of their portfolio during 2000, but this compared favourably to the 10% decline in the value of the benchmark FTSE-100 index during the same time period.
However, the survey also pointed out that there are currently ongoing challenges that are undermining the profitability of investment firms and to which there seem to be no quick fixes at present.
Execution-only brokers are in the main currently unprofitable given the fall-off in trading volumes after the dot.com boom.
New products, consolidation and cost-cutting measures are the order of the day, but there is evidence that customer numbers are increasing, although they are trading less often.
Traditional advice-based firms are also being squeezed by the ongoing fall in trading volumes, but the fingers burned by individual investors who piled into the market without advice early last year seems to have resulted in a return towards more professional advice.
These difficulties are likely to remain in place during the immediate future, the survey suggests, because the ratio of sell trades to buy trades has again swung in favour of the former following the buying binge of 1999 and early 2000.
Still, despite these difficulties, the figures indicate that execution-only share dealing grew 31% between 1999 and 2000 and advice-based trading grew 11%.
Online broking continues to account for an increasing share of the overall volume of execution-only trading, despite worries expressed by online dealers about shrinking deal sizes and margins under pressure.
The number of people employed in broking and providing investment advice continues to grow strongly, with staff numbers at execution-only firms up fourfold since 1992, and at traditional advice-based firms up by more than 50% during the same time period.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till