Brokers

Investment Platforms Market Study

The Financial Conduct Authority (FCA) have just published an interim report on their study of “investment platforms”. It makes for very interesting reading. That is particularly so after the revelations from Hardman last week. They reported that the revenue per assets held on the platform from Hargreaves Lansdown (HL) was more than twice that of soon to be listed AJ Bell Youinvest. HL is the gorilla in the direct to consumer platform market with about 40% market share. HL earns £473 ...

Protecting Yourself Against Administrations

Investors now know that when your stockbroker goes into administration, your assets are not secure (or “ring fenced” as your contract with them often says) because they can be seized under the Special Administration Regulations by the administrator to pay their costs. This has become clear from the Beaufort case. That means many investors are facing losses because Beaufort client accounts, like most stockbroking accounts now, were nominee accounts with the shares registered in the name of Beaufort. There are two possible ...

Beaufort Administration, Intercede and the Mello Conference

Yesterday I attended the first day of the 2-day Mello investor conference in Derby. There were lots of good presentations and some interesting companies to talk to. One hot topic of conversation was the collapse of Beaufort which was forced into administration (see two previous blog posts on the topic for details). There are apparently many people affected by it. There are a number of major issues that have arisen here: The administrators (PWC) have suggested it might cost as much as ...

Which Is The Cheapest Platform?

Many investors do not research which trading platforms (a.k.a. on-line stockbrokers) are the cheapest before they sign up with them. Neither do all platforms offer the same facilities – for example all the different types of ISAs and allow investment in both funds and investment companies or direct shares. Retail investors tend to depend on which name they remember from advertising, from friends’ recommendations and other sources. But now the Association of Investment Companies (AIC) has provided a useful comparison tool. The ...

ShareSoc will Demand Action from the FCA over Account Switching Delays

Earlier this month I read this Times article concerning disgruntled clients of Barclays' Smart Investor platform. It highlights once again the longstanding issue that changing your provider of share trading services (stockbroker or platform) is often a painful process. It is not unusual for the switch to take several months, during which you may not be able to sell shares that you own or access funds held in your account. I find this unacceptable in the 21st century, when modern IT systems ought ...

Hargreaves Lansdown and Fund Charges

Phil Oakley of Sharescope wrote a good piece on Hargreaves Lansdown (HL) in his weekly roundup published on 16th February. Why are they so profitable a business when, as Terry Smith said, they seem to be in essence a “distributor” operating in a highly competitive field with few barriers to entry? The answer, apart from their high-quality customer service, is the level of charges they make on investment in funds (unit trusts and OEICS, not investment trusts which are treated as ...

Barclays Stockbroking Complaints

Several newspapers and on-line news services have reported this week on the debacle at Barclays. They launched a new “Smart Investor” site to replace their Barclayshare share trading service. The complaints range from failure to advise new account log-in details, support service uncontactable, old features missing (or perhaps simply moved elsewhere and not easily found in some cases), higher charges (fees restructured), to some account types or share holdings being no longer permitted. Barclays have integrated it with their on-line bank account ...

Another Financial Services Scandal: Broker Fined

A second Broker that has been fined by the Securities and Exchange Commission for years of committing ADR Securities Violations. This is yet another example of the unacceptable behaviour and bad culture that has pervaded far too many financial services organisations (and arguably still does). In this case Banca IMI Securities Corp issued ADRs even though it did not own the underlying shares. This made it possible for such ADRs to be used for inappropriate short selling or inappropriate profiting around dividend ...

TD Direct & the FCA – Update

There have been further developments since my original blog post, on the topic of changes to TD Direct's client monies policy, which cause me to re-examine the issue and its implications. Firstly, I am pleased that Interactive Investor, TD Direct's new owner, have responded to my post, as follows: Interactive Investor’s primary responsibility is the security of a client’s data, cash and assets. Current FCA rules state that client money must not be placed out on unbreakable deposits of more than 30 days. ...
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