UK Stockbroker News Bulletin – February 2023

The Financial Expert UK Stockbroker News Bulletin is an authoritative round-up of the breaking stockbroker news, trends and press releases about the UK brokerage industry, such as:

  • Shakes and movers
  • Product launches
  • The closure of services
  • Regulatory changes
  • Awards & ranking updates

If you’re tired of reading the same re-hashed content by financial blogs, follow Financial Expert for up-to-date coverage of the UK’s best stockbrokers.

‘Investor essentials’ tier announced by interactive investor

Interactive investor – a flat-fee friendly investment platform owned by asset manager Abrdn has announced a new pricing tier in its lineup.

The new price point is cheaper than previous offerings and is aimed squarely at small investors.

The account is available for the low monthly fee of £4.99 – so long as your portfolio remains under £30,000. 

As we highlighted in our review of interactive investor, flat fees were a revolutionary proposition when launched by ii years ago, but they can be difficult to swallow for beginners. For those with only £500 to invest, even a £9.99 monthly fee can represent a daunting proportion of assets under management. This can discourage those on low income from investing altogether. 

The Investor Essentials account is a low-frills affair. For that fee, investors can expect to receive Stocks & Shares tax wrapper, and ‘free regular investing’. This is referring to a regular direct debit instruction that is invested on your behalf in a pre-selected group of investments. Ordinary trades will cost £5.99 each – more than the account fee. 

The account is most suitable for new investors who want to begin their investing journal by drip-feeding a portion of their wage into a simple fund (or fund or funds) each month and invest passively. 

eToro 16 years

Sweet 16? eToro, the share trading app that won our 2022 and 2023 ‘Best overall stockbroker’ award has turned sixteen. As we explain in our eToro review, the firm was founded in 2007 and has witnessed explosive growth in the decade and a half since. 

Just five years ago, few investors had even heard of eToro. Its offering was as far from that of a dying full-service stockbroker, and yet it felt so packed with innovative features such as CopyTrading and its on-platform social network that has evolved around each tradable instrument. eToro has brought commission-free trading to the UK and stock ownership into the hands of many young investors for the first time. 

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

FTSE 100 breaches all-time high 

The broader equity landscape may still be gloomy, but pockets of good news in the financial markets still exist. 

On 3 February, the UK blue chip stock index FTSE 100 reached an all-time high of 7,905. This news followed a remarkably stable performance from the index during the previous year, in which it beat all comparable developed world indices. 

On 15 February, the index breached 8,000 for the first time, making the index now worth 8 times its starting value of 1,000 back in 1984.

There are two defining factors driving recent FTSE 100 performance, and indeed the outperformance against other indexes. 

The first is the sector tilt of the index towards mining and energy companies, which have reaped rewards in 2022 and 2023 to date, as the price of the products they sell have skyrocketed thanks to the Ukraine war, the restart of the Chinese economy and short-term supply constraints. On 16 February, British Gas-owned Centrica PLC announced bumper profits exceeding £3 billion, much to the dismay of the general British public.

The second factor that has favoured investing in the FTSE 100 is the weakening of the Pound. The anaemic growth of the British economy created a perceived inability on the part of the Bank to fight inflation effectively. This momentum was accelerated by the largesse of fiscal policy announced by the now infamous prime minister Liz Truss, who signalled that conservatism no longer included tight-fisted and carefully-costed spending policies. This led to a flight of currency toward the higher-yielding US Dollar and other safe haven currencies. A weaker Pound meant that the foreign currency cash flows of the Footsie’s highly international membership would now convert to a high value of pounds. This meant that in spite of economic disaster, earnings and dividend forecasts of British blue-chip companies saw a significant rise.