The City’s bulge-bracket brokers have struggled with increased competition from mid-cap specialists, according to analysis of the biggest winners and losers in client numbers over the last five years.

The top three gainers over the five-year period were Peel Hunt, Numis, and Liberum, all of which were founded long after some of London’s oldest financial names in the broking world, according to figures from data firm Adviser Rankings.

The blue-blooded JP Morgan Cazenove was last year knocked off the top spot in terms of UK stock market clients by Numis, which had 193 clients compared to 188 in November 2017.

Changing of the guard?

Ranking Increase in clients

2017 vs 2012

November 2012

(No. of stock market clients)

November 2017

(No. of stock market clients)

1 Peel Hunt (+60) J.P. Morgan Cazenove (218) Numis (193)
2 Numis (+55) Canaccord Genuity (140)

J.P. Morgan Cazenove (188)

3 Liberum Capital (+45) Numis (138) Peel Hunt (122)
4 Panmure Gordon (+38) Cenkos (119) Cenkos (113)
5 N+1 Singer (+37) Investec (102) finnCap (113)
6 finnCap (+24) finnCap (89)

Panmure Gordon (108)

7 Investec (+3) Panmure Gordon (70) Investec (105)
8 Cenkos (-6) Peel Hunt (62) N+1 Singer (91)
9 J.P. Morgan Cazenove (-30) N+1 Singer (54)

Liberum Capital (87)

10 Canaccord Genuity (-61) Liberum Capital (42)

Canaccord Genuity (79)

Firms targeting mid-cap businesses have gained more clients (Source: Adviser Rankings)

Numis gained a total of 55 clients between 2012 and 2017, although Peel Hunt edged it in terms of the number gained, almost doubling client numbers by 60 to reach 122.

The largest firms on the FTSE 250 have proved stickier business for the bigger banks, with JP Morgan Cazenove retaining its top spot in client numbers over the five years, while Barclays and Citi were two of the biggest net gainers over the five-year period.

Yet even among the behemoths at the top, challengers have made some inroads, with Numis and Peel Hunt leading the number of clients gained, with 14 and 11 apiece.

Read more: JP Morgan Cazenove widens its lead as top FTSE 100 stockbroker

Steven Fine, chief executive at Peel Hunt, said Mifid II means brokers now need to grow their corporate clients to survive. Meanwhile, large corporates are increasingly looking beyond the biggest banks for their broking services.

The shake-up to the industry provided by the Mifid changes, which mean brokers have to justify the fees they charge for research, will result in a wave a mergers and acquisitions as weaker firms get picked off, Fine added.

He said: “In a post Mifid II world, we fully expect consolidation to accelerate as the new regulatory environment puts further pressure on research revenues and as the leading specialist brokers gain market share thanks to our wider distribution platforms.”

Read more: Numis steals the crown of top City stockbroker from JP Morgan Cazenove

Full story: Mid-cap stock brokers steal a march on bulge-bracket names: City A.M.