During the period leading up to the implementation of MiFID II last month, Adviser Rankings found that brokers specialising in the mid-cap space experienced the fastest growth in clients.
Over the past five years, mid-cap brokers have been leading the pack in terms of share gains since November 2012, Adviser Rankings analysis has found. During the period, Peel Hunt has gained an additional 60 clients, a large increase compared to J.P. Morgan Cazenove’s loss of 30 clients.
Peel Hunt CEO Steven Fine commented: “No longer are large corporates just going directly to the bulge bracket for corporate advisory support, but rather are recognising the benefits that mid-cap specialists can offer, such as high quality, broad-based research coverage and strong distribution capabilities in the UK, North America and other international markets.”
The highly profitable brokers such as UBS, Bank of America Merrill Lynch and Deutsche Bank “all saw the largest decrease in the FTSE 250 client advisory roles over the past five years”, the firm said.
Between November 2012 and November 2017, three mid-cap brokers have successfully acquired market share through consolidation. For example, Liberum bought a majority of Espirito Santo’s corporate broking business in 2013 and Panmure Gordon acquired Charles Stanley’s corporate broking operations in 2015.
Fine further commented: “In a post MiFID II world, we fully expect consolidation to accelerate as the new regulatory environment puts further pressure on research revenues and as the leading specialist brokers gain market share thanks to our wider distribution platforms.”
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