By Adele Burton Online stockbroker Charles Schwab is reviewing its staffing policies at its UK op...
By Adele Burton
Online stockbroker Charles Schwab is reviewing its staffing policies at its UK operation, Charles Schwab (Europe) because of a downturn in trading volumes.
Jane Drew of Charles Schwab's UK operation said the broker was "looking very carefully at the company and assessing what resources we need". Private investors are shying away from the turbulent market conditions and Schwab's move may be mirrored at other brokers.
Justin Urquhart Stewart of Barclays Stockbrokers said companies that do not combine trading services with discretionary portfolio management and advisory stockbroking will be hardest hit..
He predicted that job losses in the UK's online stockbroking industry this year would follow the trend of US brokers such as CSFB direct (the online division of Credit Suisse Boston), TDWaterhouse and Ameritrade, which have cut jobs to boost profit figures and combat falling revenue.
Charles Schwab introduced a "hiring freeze" in its US business at the end of last year.
Urquhart Stewart said: "You've already seen US brokers cutting back their marketing budget. Also those brokers who set themselves up as execution-only brokers last year will find life very difficult because they employ people to answer phones and do the settlement process, which is directly related to volumes. If that volume halves, which it has done, then you don't need as many people," he said.
Urquhart Stewart said that the only way to survive in the current market is by having three different incomes: commission from execution only; advisory services, which have a fee and commission; and discretionary services, where people manage funds for a fee.