UK e-commerce group CMC Markets (CMCX.L) on Thursday announced plans to launch a wealth management platform, facing existing players such as Hargreaves (HRGV.L) and AJ Bell (AJBA.L), after reporting a double annual profit.
Peter Cruddas, managing director of the London-listed company, told Reuters he expects the new platform to be up and running around this time next year.
“We’re going to disrupt the market, we’re going to lower commissions and lower execution costs,” he said.
CMC, which facilitates the trade of complex financial instruments, has raised its outlook several times this year as a boom in retail has fueled volumes.
The company’s active customers in contracts for difference (CFDs) jumped from 19,389 to 76,591, while profit before tax more than doubled to 224 million pounds ($ 315.80 million) for the fiscal year ended March 31.
“We have been encouraged by the growing interest in stocks, not just because of ‘meme’ stocks, but also because of the trend towards tech stocks,” CMC deputy managing director David Fineberg told Reuters. .
Competitors IG (IGG.L) and Plus500 (PLUSP.L) also recorded strong results, fueled in part by the “GameStonk” retail phenomenon. Gamestonk takes its name from the American video game retailer GameStop (GME.N), which is said to have been the starting point of the trend. Read more
“CUT THE MARKET”
The GameStonk effect has been most visible in the United States, where online brokers such as Robinhood have thrived on a boom in retail. Read more
CMC noted a moderation in customer business activity, but also said levels of existing active customers are likely to be sustainable.
The company did not disclose more details on its planned wealth platform, first reported by Sky News, but Cruddas was confident in its prospects.
“We know what the competition charge. We will definitely undermine the market.” he said.
($ 1 = 0.7093 pounds)
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