Two snapshots of how the financial services sector is doing today – and two very different outlooks.
City broker Peel Hunt reports profits down 99% (ninety-nine per cent, the vidiprinter doing the football scores might have felt the need to clarify).
That’s a function of nerves in the Square Mile and among corporate clients. No one wants to float or do risky deals in the teeth of a recession.
Over at AJ Bell, a brilliant business which punts shares to retail investors, things are going swimmingly. New customers are pouring in. Revenues and profits are up smartly. Growth seems easy to come by.
The risk here must be that the City broker is ahead of the game. Retail investors are blithely carrying on, unaware of the turmoil that has left many professionals running scared.
When the retail market plays catch-up with the City, there shall be burnt fingers for tea.
Into this noise marches the Financial Conduct Authority, which is seriously worried about the “gamification” of share trading.
A new breed of apps – not AJ Bell, let’s be clear – are offering incentives to trade as if they were the Tesco Clubcard.
There are points and celebratory messages for making a trade, something that entices the armchair punter to treat the stock market as if it were Call of Duty.
During lockdown a “meme-stock” trading frenzy encouraged some small investors into the delusion that they could bet against, and beat, giant US hedge funds.
The delusion will be corrected, one way or the other.
