The analyst team continuously monitors new developments and evolving trends within the retail brokerage industry.
In this report, we reviewed publicly available data on client growth across retail brokers. Continue reading to discover the key insights uncovered.
Global client growth is driven by US brokerages
Client numbers globally show a massive 200% growth (i.e. a tripling in numbers) on average in the US and in the European Union for the first half of 2020 compared to one year earlier. Looking at it by region, it’s clear that this growth is being driven mostly by US brokerages, which saw a whopping 357% increase on average.
Huge differences in profit-making capability
Net revenue and operating profit did not grow at US brokerages. Revenue grew significantly at CFD and forex brokers globally, less so at stockbrokers:
Trading Volumes Surge to Exceptional Levels
At the beginning of 2021, user numbers rose sharply across the industry. Alongside this increase, trading activity accelerated even beyond the heightened levels seen during the market turmoil of March 2020. In fact, the number of executed trades jumped by an impressive 117% over this period.
Demand for Alternatives to Robinhood Explodes
Despite platform outages and trading restrictions at several brokers, retail investors remained eager to participate in the market surge. This is evident in the sharp rise in interest toward platforms competing with Robinhood after its service disruptions. Data indicates that Webull, TD Ameritrade, Fidelity, and E*TRADE attracted the largest share of users migrating away from Robinhood.
The table below illustrates how traffic related to Robinhood alternatives increased, based on website visit data.
Other areas of interest to research
We’ve seen at some brokers that there is a strong correlation between lockdowns and an increase in trading activity. In the future, we might look into how these play together.
You can download our findings here.