By Pushkala Aripaka and Muvija M
(Reuters) – British e-commerce group CMC Markets announced plans on Thursday to launch a wealth management platform, taking on existing players such as Hargreaves and AJ Bell, after reporting a doubling of annual profits.
Peter Cruddas, chief executive of the London-listed company, told Reuters he expects the new platform to be up and running by this time next year.
“We’re going to disrupt the market, we’re going to drive down commissions and execution costs,” he said.
CMC, which facilitates trading in complex financial instruments, has raised its outlook several times this year as a retail boom fueled volumes.
The company’s active clients in contracts for difference (CFDs) jumped from 19,389 to 76,591, while pre-tax profit 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 equities, not just because of ‘meme’ stocks, but also because of the trend towards tech stocks,” CMC deputy chief executive David Fineberg told Reuters. .
Rivals IG and Plus500 also posted strong results, fueled in part by retail phenomenon “GameStonk”. Gamestonk is named after American video game retailer GameStop, which is said to have started the trend.
The GameStonk effect has been most visible in the United States, where online brokers such as Robinhood have thrived on a retail boom.
CMC pointed to a moderation in client trading activity, but also said existing active client levels are likely to be sustainable.
The company did not release further details of its planned wealth platform, first reported by Sky News, but Cruddas was confident about its prospects.
“We know what competitors are charging. We will definitely undermine the market.” he said.
(Reporting by Pushkala Aripaka and Muvija M in Bengaluru; Editing by Devika Syamnath and Jane Merriman)
Copyright 2021 Thomson Reuters.