Market Trends of E-Brokerage Industry in the United Kingdom
This section covers the major market trends shaping the UK E-Brokerage Market according to our research experts:
The UK’s exit from the European Union
During the 2020 financial year, Companies having operation in both parts of the economies suffers a lot. Many brokerage firm set-up new entities or branches in European Union.
For e.g., IG Group Europe, our new client-facing subsidiary domiciled in Germany, became fully operational. We've successfully transferred the majority of our EU-resident client base to contract with IG Europe. Although the exact ramifications of the future trading relationship between the UK and EU remain unclear, IG now has an operating structure that should enable us to offer our regulated financial products in all EU member states once the transition period has ended.
The level of volatility in financial markets
Companies' ability to attract new clients, and the willingness of clients to trade, are driven substantially by the numbers of clients who are seeing opportunities to trade in the financial markets. Higher levels of volatility tend to generate more trading opportunities, and these in turn attract new clients and increase the level of individual client trading activity. Measures of financial market volatility, such as the VIX index, reached unprecedented levels during the 2020 financial year. This surge was triggered primarily by the Covid-19 pandemic and has resulted in exceptional revenue performance. However, these levels of volatility aren't expected to continue over the medium term. Any future reduction in the general level of volatility is likely to have a detrimental effect on revenue, since this is driven by overall numbers of active clients and the level of each client's activity - both of which depend on market conditions.
