Number of UK stockbroking complaints declined by over 74% in last 10 years

Number of UK stockbroking complaints declined by over 74% in last 10 years

Measures put in place by the UK financial regulators on managing stockbroking seems to be paying off due to the reducing number of investor complaints. Over the last three years, complaints relating to stockbrokers have plunged to hit an all-time low in the past decade.

Data gathered by Buy Shares shows that between the 2009/10 and 2019/20 period the number of stockbroking complaints in the United Kingdom dropped by 74.57%. According to the data, between the 2009/10 period, the complaint stood at 2,474, the highest figure in the last 10 years. By 2019/20, the complaints registered stood at 629. During the period under review, the second-highest complaints were recorded during the 2013/14 period at 2,448 before declining slightly by 14.37% to 2,079, the following year.

From the data, the decline in stockbroking complaints began during the 2017/18 period at 1,688, a drop of 23.44% from the previous year which had 2,205 complaints. By 2018/19, the complaints significantly dropped to 1,069 before witnessing a plunge of 41.16% to the current figure of 629. It is worth mentioning that the latest number of complaints is the first time the figure dropped below the 1,000 mark.

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UK residents interest in how to trade stocks skyrockets amid Covid-19 pandemic

The Buyshares.co.uk data also overviewed the United Kingdom’s interest on how to trade in stock based on queries logged on the search engine platform Google. Between June 2010 and July 2020, the interest grew by 182.75% after recording a popularity score of 29 and 82 between the two periods. Notably, the interest took a steady spike amid the Coronavirus pandemic, between February 2020 and July this year, where the interest grew by 100%.

In February, the search had a popularity score of 41 which later grew to 65 in March. The interest then took a plunge of about 3.1% in April. There was a further drop of 50 in May before rising to 51 in June this year. In January the search had a popularity score of 32. Over the last 10 years, UK queries on how to trade stocks attained the peak popularity score of 100 in January 2016. Another notable high was recorded at 84 in December 2014. On the other hand, September 2010 and June 2011 registered the lowest interest on how to trade stocks with a popularity score of 0.

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The Google trends platform popularity score numbers represent search interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular.

UK stockbroking complaints drop after reclassification

Stockbroking refers to a service that allows retail and institutional investors to buy and sell equities. In this case, stockbrokers trade shares both on-exchange and over-the-counter, dependent on where they can find the best price and liquidity. From the data, the number of stockbroking complaints in the United Kingdom has dropped in recent years following the reclassification.

Reclassification is the process of changing a share class issued by mutual funds. This mostly occurs when certain requirements have been met. For the UK, before 2018, portfolio management was also covered under the same category.

However, the use of stockbrokers can lead to some complaints from investors due to the violation of the trading agreement. In the stockbroking world, some complaints are common like theft. This type of complaint is a situation where a stockbroker will use their privileged position to steal the funds directly from an investor’s trading account. Additionally, unauthorized trading is a common stockbroking complaint. Furthermore, failure to disclose a personal conflict of interest by stockbrokers has emerged as a common complaint.

An overview of the UK residents on interest in stock trading relates to a period when the stock market experienced historical lows thanks to the coronavirus pandemic. In the wake of the pandemic, stocks spiraled into a bear market as the government-mandated a shutdown of the economy. With stocks experiencing historical lows, investors saw an opportunity to invest their money to reap higher returns once the market bounces back.

However, the market has shown signs of recovery as the UK reopens its economy. Investors will also be keenly following the pandemic situation as other parts of the world stare at a possible second wave.