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Share plc sees RDR as an opportunity, not a threat

'We will be adopting 'clean share classes' for customers, rather than leaving investors paying higher management fees (and therefore trail commission) with some token 'bonus' repayment,' Share said.

 

Retail stockbroker Share (LON:SHRE) made a decent fist of difficult market conditions last year, gaining market share against its peers, even as dealing volumes declined.

Share, which owns the prized web address of www.share.com, saw revenue and profits decline in 2012, as risk averse investors turned their backs on equities.

Share’s revenue in 2012 eased to £13.91mln from £14.26mln in 2011 which fed through to sharply reduced profit before tax of £668,000, versus £1.57mln in 2011.

Nonetheless, Share’s management took consolation from the fact that its market share against a selection of peers improved to 6.8% from 6.1% in 2011. Share has measured its performance against these peers since 2006; the group comprises Alliance Trust Savings, Barclays Stockbrokers, Equiniti, Halifax Sharedealing (HBoS), HSBC Stockbrokers, NatWest Stockbrokers (RBS), Saga Personal Finance, Selftrade and TD Direct Investing.

Share regards the market share measurement as its key benchmark; it cannot do much about market sentiment and trading volumes, so it focuses on doing a better job than its competitors.

As such, chief executive officer Gavin Oldham told Proactive Investors the company was “very pleased” to have won the Stockbroker of the Year award in 2012, as voted for by the readers of the Financial Times and the Investor’s Chronicle.

Profits may have fallen but the company saw net cash increase 11% to £12.2mln from £11.0mln the year before, paving the way for an increase in the 2012 dividend from 0.36p to 0.43p.

In an interview with Proactive Investors, Oldham and finance director/chief operating officer Richard Stone said that 2013 was shaping up to be a better year for the company than 2012.

“For one thing, the returns on cash ISAs are miserable, so people are increasingly turning to equities as an alternative,” Stone said.

At the same time, the recently introduced changes recommended by the Retail Distribution Review (RDR) has shaken up the independent financial advisors scene, creating an opportunity for operators such as Share, where the company ethos is very much one of empowering private investors to take control of their own financial destiny.

“We remain focused on our core business. We’re not threatened by RDR; on the contrary, we see it as an opportunity, not a threat,” Oldham said.

Reflecting this, the group intends to launch more of its own funds managed and overseen in-house.

“With a relatively small proportion of our customers' assets currently invested in funds we see this as an opportunity to grow our customer base and the value of assets we administer,” the company statement said.

 

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