Popular retail investment platform AJ Bell PLC (LSE:AJB) has caused a mini uproar after suddenly removing a chunk of smaller listed companies from its online trading platform.
Specifically, AJ Bell made the decision on Thursday to limit trading of companies listed on the ‘Access’ segment of the regulated Aquis exchange to phone orders only.
That means that from now on, AJ Bell customers will need to call up the broker and speak with a representative before placing an order for company shares listed on Aquis’ Access segment.
According to an AJ Bell spokesperson, this was a direct decision made in order to protect its customers.
Companies listed on the premium ‘Apex’ segment were also briefly removed from online trading, though AJ Bell reinstated the option later in the day.
The decision by AJ Bell to limit customer access to small, less liquid stocks proved divisive.
Melissa Surgess is the chief executive of Ananda Developments Plc (AQSE:ANA), an Aquis-listed (on the Apex segment) pharmaceutical company focused on the development of CBD-based medications.
Sturgess first brought AJ Bell’s decision to light in an incendiary LinkedIn post where she said it was “a disgrace to disallow app based buys of Aquis Exchange stocks”.
“At a time when we are all trying to build and support small caps in the UK you do this. And you have not communicated with any of us who run these companies or the punters who are trying to support us,” she added.
Responding to the post, Aquis’s LinkedIn profile said “we have been speaking with AJ Bell for several days to try and resolve this issue”.
But AJ Bell has stuck to its guns.
A spokesperson highlighted to Proactive that many of these Access companies, which comprise a smattering of minnows in the investment, energy, hospitality (including brewer Adnams plc (AQSE:ADB)), digital assets, real estate and mining sectors, can be highly illiquid, volatile and risky.
For AJ Bell, limiting the trading of these stock to phone only allows the company to highlight the capital risks involved to its customers.
While AJ Bell said it acknowledged these companies’ frustrations, the spokesperson remarked that its duty of care lies with its customers, not to the companies whose shares are traded on the platform.
As a challenger exchange, Aquis does not exist under the safety umbrella of the London Stock Exchange, but it is a recognised investment exchange under the Financial Services and Markets Act 2000.
Nonetheless, AJ Bell appears unlikely to reinstate app-based trading for Access stocks.
“I still think that’s pretty appalling”, Sturgess told Proactive, adding that “it feels like nanny-state, heavy handed stuff to me”.
For Sturgess, these decisions should remain up to the punter.
Not that AJ Bell would agree.