Stockbrokers’ basic pay is falling for the first time in decades, the chief executive of institutional broker Arden Partners said today.
“There is wage deflation in broking for the first time in my 26 years in the industry,” said Jonathan Keeling. “Good people are knocking on our door and offering to come and work for us at competitive prices. It’s sad for individuals who have lost their jobs but there is a real pool of talent out there now.”
Arden’s headline profit fell by a third to £1 million in the first six months of the year but for the first time since the financial crisis broke four years ago it is paying a dividend to shareholders — albeit a modest 0.65p a share.
“We have a very strong balance sheet,” said Keeling. “And while we have been careful to cut costs as much as we can, it means we do not have the short-term cash worries which affect some of our competitors.”
For the last five years, Arden has grown its international business, particularly helping Indian companies to float in London. This has shielded it from some of the worst of the collapse in UK broking revenues. The group raised £71 million for clients in the first half, with the majority of that for global companies.
Revenue for the six months fell from £7.4 million to £5.6 million and the wage bill was cut by 24% to £2.4 million. At its height in early 2008, Arden employed 70 people. Today it has 45.
Keeling is counting no chickens: “Trading in the markets so far in the second half has been challenging, due largely to the ongoing eurozone problems, and these conditions are anticipated to remain until such time as a substantive geopolitical resolution is found.”
