How has the UK online retail brokerage market evolved over the past 12-18 months?

The self-directed brokerage market in the UK continues to evolve in the post-financial crisis world. Investors increasingly demand transparency, competitive pricing, greater control over their investments, and multichannel account accessibility, while regulators impose stringent legislation with the intent to protect investors. Despite a challenging and volatile environment over the past several years, the self-directed market has shown moderate growth. In an effort to retain and attract retail investors, online brokerage firms continue to improve the client experience by enhancing trading functionalities and platforms, offering multichannel account access, deepening their asset class lineup, and developing innovative, tech-driven tools and solutions. The UK brokerage market is fragmented, with market entrants and “digital disruptors,” such as digital online advice and social trading firms, which are challenging traditional brokerage firms, while nontraditional brokerage firms have expanded into the space. In this report, Celent aims to provide an overview of the current UK online retail brokerage market with particular attention to digital strategy developments among firms serving the self-directed retail investor. Celent will endeavor to:

• Segment the UK brokerage firms based on their client type.
• Identify recent developments and trends to the industry.
• Categorize retail investor product preferences.
• Provide a breakdown of the various customer investor groups.
• Size the retail investor market by approximating the current and future self-directed investor population and next generation of investors.
• Identify the major market players and types of firms.
• Highlight developments in firms’ digital strategies, including the online, social, and mobile channels.
• Conclude with a prospective look at the future of the online brokerage industry, the growth of the various retail investor categories, and how online brokerages can differentiate themselves in the marketplace.

“In order to attract and retain clients, particularly NextGen investors, online brokerage firms should focus on building a robust digital strategy,” comments Ashley Globerman, an analyst with Celent’s Wealth Management practice and author of the report. “With the proliferation of the Internet, information and education, social media, and the affordability of smartphones, clients’ expectations are changing. As such, the enhancement of online trading platforms, mobile apps, and social media presence are critical features to develop in this fragmented market. For example, we are seeing the addition of social features and hybrid services, both DIY and advisor-led, among traditional brokerage firms.”