If you’re interested in which UK stockbrokers have the most assets under management or assets under administration, you’re in the right place. Below, we share our independent research into the UK stockbroker market. We also reference our sources so that you can check them out yourself.
The simple truth is that there is no simple, publicly available league table of UK-only stockbrokers which discloses UK assets under management. Therefore, we’ve had to create our own!
This has required some digging by our team to bring this information to you. It also means that the information comes with some caveats regarding reliability, as the data is only as relevant and accurate as the press release or disclosure from which we sourced each data point.
What does assets under management mean?
We use the term assets under management and assets under administration quite interchangeably in this article. What we’re referring to is the total value of all customer accounts held with a UK stockbroker. It is more factually accurate to call this figure the ‘Assets under administration’ or AuA, rather than ‘assets under management’ as an executive-only broker does not actively ‘manage’ a large proportion of clients assets. This is done by the ETFs, value funds, venture capital trusts, Property investment trusts and other collective investment vehicles chosen by their clients.
This will include the value of the following assets held within a customer account:
- Cash (in all currencies)
- Any other investments*
*Self Invested Personal Pensions, or SIPPs for short, can hold quite a wide variety of investments. We will assume that the value of these investments would also be included within any publicly disclosed assets under management released by any firm.
What do we mean by ‘UK stockbroker’?
We must begin by clarifying what we term a ‘UK stockbroker‘. For the purposes of this article, a UK stockbroker is a financial services firm which is either:
- Registered as a company in the UK and regulated by the Financial Conduct Authority (FCA), or;
- Registered as a company within the European Union, and is permitted to conduct financial services business in the UK by the FCA.
Prior to Brexit, European brokers operating in the UK did so under a ‘passporting’ arrangement. Post-brexit, any services made into the UK by a European company is subject to the trade deal which was agreed in December 2020.
We have deliberately included both British and European companies because to all intents and purposes, both of these groups of companies can operate in a similar manner regardless of their domicile, thanks to the previously extant free market, and the recent trade deal going forwards.
Please be aware that many international stockbroker groups may establish a UK subsidiary company which would fulfil these criteria. Therefore you may find US or Canadian stockbroking groups listed below.
How we measured the number of clients of UK stockbrokers
Again, as stockbroker client data is difficult to come by, we have performed independent research to generate the data used in this report.
Our sources of information vary, from Annual Reports, to stockbroker press releases, to news/media reports or regulatory filings. A real risk exists that this data is now out-of-date, incomplete or is not directly comparable between firms. We don’t intend to present this ranking as an official chart or dataset which could be relied upon. This is simply our best effort to try and shine some light on an opaque marketplace.
However, we hope that this list still gives a clear impression on the relative market share and size of the best UK stockbrokers.
List of largest UK stockbrokers by assets under administration
Hargreaves Lansdown – £104bn Assets Under Administration (UK stockbroking only)
Source: HL Annual Report June 2020
Hargreaves Lansdown is the unrivalled UK stockbroker when comparing the size of firms. Hargreaves has £104bn of assets under administration, which is double its closest UK competitor.
Why does a high AuA help Hargreaves Lansdown? It charges an annual platform fee on the value of client accounts. Therefore, high assets under administration mean more platform revenue. For example, it charges a fund fee of 0.45% – 0% on the value of funds held on its platform through a shares & funds account. It charges 0.45% – 0% on assets held with a stocks & shares ISA.
Higher assets under management also suggests a greater number of clients, which means more trading volume and ultimately more trading fees.
It is clear that in the stockbroking business, having the highest assets under management is a competitive advantage. Many of the costs of operating a stockbroker are fixed, such as regulatory and IT costs. Spending relatively fixed costs whilst continuing to grow revenue has allowed Hargreaves to generate an operating margin of over 60%, which is the envy of the industry.
Does this scale lead to the best outcome for customers? This isn’t entirely clear. HL’s high operating margin is evidence that HL captures a sizeable share of the economies of scale. In other words, these savings aren’t simply passed onto its clients through lower fees. This would erode operating margin. HL has not lead a ‘race to the bottom’ on account charges. For every £1 Hargreaves Lansdown generated in revenue in Financial Year 2020, it made 57p of profit.
It is no wonder that Hargreaves Lansdown is not only the biggest UK stockbroker by assets under administration, but also the most valuable stockbroker in the UK. It’s market capitalisation on the London Stock Exchange was £7.9bn.
AJ Bell – £62.5bn assets under administration (UK – stockbroking only)
Source: AJ Bell official website – https://www.youinvest.co.uk/about-us – 2020
AJ Bell is a UK stockbroker, formed in Manchester and is listed on the London Stock Exchange. It currently holds second place on this list of stockbrokers by AuM. It has disclosed assets under administration of £62.5m on its website.
It calls its flat account fees ‘shares custody fees’ and ‘funds custody fees’, but they’re effectively the same administration charge as you see elsewhere. AJ Bell attempts to undercut Hargreaves Lansdown with its total fees. Its website features a ‘fees calculator’ which gives an indication of the total platform and trading fees you might expect to incur.
Below this output, it displays an estimate of the equivalent HL charges. This allows for a comparison. After inputting various pot sizes and trading levels, we found that in the majority of scenarios, the AJ Bell estimate was lower than the HL estimate, however this was not always the case. Where we modelling a user making a very high number of fund trades (20+), the HL charges were sometimes lower than AJ Bell.
Interactive Investor – £45bn assets under administration (UK – Stockbroking only)
Source: Interactive Investor official website – https://www.ii.co.uk/about-ii
Interactive investors is a UK stockbroker based in Manchester. It touts assets under administration of £45bn on their website.
As a broker which charges flat fees, rather than a % of client assets, the AuM figure is perhaps not as important to Interactive Investor than its number of clients. It’s revenue will directly scale up as it signs up new investors, but additional deposits from existing clients will not lead to higher platform fee income.
The Share Centre – £5bn assets under administration (UK – Stockbroking only)
Source: the share centre offical website – data taken from 2018
The Aylesbury-based stockbroker The Share Centre was launched in 1991 and was recently acquired by Interactive Investor for £62m.
On its company history page, it reports that by 2018 its assets under adminstration had grown ‘to exceed £5bn’. This figure will now be subsumed within the large Interactive Investor figure quoted above.
Vanguard Investor – £4.2bn assets under administration (UK – Stockbroking only)
Source: FN News September 2020 – https://www.fnlondon.com/articles/vanguard-uk-retail-funds-almost-double-to-4bn-in-year-of-volatility-20200928
New to the scene, Vanguard arrived as a UK stockbroker in 2017. In fact, Vanguard is still better described as a fund manager or asset manager, because it manages each of the funds it offers on its Vanguard Investor platform.
Still, assets administered on the UK platform have grown to £4.2bn in the 3 years to 2020, which is an impressive start.
It’s worth holding in context that Vanguard is the world’s second largest wealth manager, with a combined global assets under management figure of $7 trillion. That’s $7,000,000,000,000. It is safe to conclude that Vanguard actually manages more client assets invested through other UK stockbrokers into its range of funds, than it sees flow directly through the Vanguard Investor portal. As time progresses and Vanguard gains more fans, this may change.
Should you pick the UK stockbroker with the highest assets under administration?
So now that you’ve seen the list, what bearing should this data have on your choice of stockbroker?
Well, we believe that it should only be a secondary factor in your stockbroker decision. Here are the factors which we think are more important.
Factors that influence the user experience:
- How quickly does the broker execute and settle trades?
- Does the broker have a good record for offering the best execution pricing?
- Does the stockbroker offer an easy-to-use platform to place trades?
- Does the stockbroker provide great customer service with support available on weekdays, evenings and weekends?
- Does the stockbroker provide tax-free account options such as Stocks & Share ISAs or Lifetime ISAs?
- Does the broker offer a wide range of investments, or a narrow selection?
Factors that could influence the financial performance of your portfolio:
- Does the stockbroker charge competitive platform fees for your account size?
- Does the stockbroker charge competitive fees per trade for shares and funds?
- Does the stockbroker have a secure and stable financial position as a business?
When we compare the best UK investing apps or stockbroker, we look at many of these factors, rather than focusing exclusively on the size of the firm.