It's been an interesting time for London's listed retail brokers; much of the focus has been on the margin trading sector, and not in a good way for some.

Is the US a graveyard for IG Group?

Cast your mind back to late July and the news that IG Group was making its second billion-dollar acquisition in just over 5 years; this time round, the target was Underdog, a sports prediction and Fantasy sports brand from Brooklyn, New York. 

The market did not take kindly to the news of the deal, and IG stock, which trades under the ticker IGG LN, lost 23.00% of its value in the days following the announcement, which was bad enough.

However, there was worse to come from a shareholder perspective. 

Because IG issued what amounted to a profit warning on October 2nd, saying that OTC revenue retention had fallen from 80.0% to 70.0%, that dip was caused by a combination of lower volatility and a new internal hedging policy. This kept more customer trading volumes in-house. 

The net result was that IG reduced its forecast for Q3 2026 total revenue by -14.0%.

One interpretation was that IG had shot itself in the foot; the market voted with its feet, and IG shares fell by another -20.0%, trading down to 923p, having touched a high of 1956p on June 15th.

IG stock has lost -48.36% of its value in the last 3 months, according to data from Barchart.com.

Analysts have largely been radio silent on IG since the warning. 

Peel Hunt reiterated its hold recommendation and £11.00 price target vs the current price of £ 12.37, and the stock retains a strong buy consensus among the analysts that follow IG Group. 

However, you have to feel that could easily change given recent events.

The company will meet with analysts and major shareholders on the 8th of October to walk them through the Underdog deal; it will also outline its strategy (going forward) at a separate meeting on October 22nd. 

Two briefings that could literally determine the future of the company. 

Against this background, it seems appropriate to look at IG's rivals and try to determine what their prospects are.

Plus500 PLUS LN 

The company took the unprecedented step of issuing its own trading statement in the wake of IG's news and a sympathetic dip in its own share price.

 Plus 500 confirmed that it was trading in line with expectations and stressed that it has a strong cash position and that it would issue a full Q3 trading statement as planned on October 20th. 

It last reported on August 10th with its H1 2026 results, which showed a 5-year high customer income and revenues at 3-year highs.

Plus 500 also announced at that time a further $182.50 million in shareholder returns, taking the total shareholder returns since IPO to an impressive $3.10 billion. 

The summer months witnessed lower volatility, and equity markets lacked clear direction, but there was increased volatility in gold and energy, which could well have compensated for that.

Plus500’s stock price has fallen by just under -12.50%over the last month and by -35.30% in the last quarter, moves that suggest momentum in the stock is fading rapidly.

UK stockbroker Panmure Liberum wrote on the stock after the unscheduled trading update, reiterating its buy recommendation and £54.00 price target, which compares to the current share price of £32.42.

The stock remains a strong buy among the 5 brokers who cover the name. 

The market will be looking for confirmation that Plus500 is indeed trading in line and also to see how the firm's US operations are faring. Plus500 has a retail futures business in the States, a sports and events prediction division, alongside a B2B institutional futures infrastructure and operations business.

CMC Markets CMCX LN 

CMC didn't escape unscathed by the fallout from IG's profit warning; its shares lost -5.50% over a couple of days in early October, part of a bigger markdown which saw them lose -15.40% over the last month, though year-to-date they are up by +122.0%. 

Founder, CEO and major shareholder Lord Peter Crudas has bought £1.0 million of the firm's shares in recent days; he already owns some 60.00% of the business, which has a market cap of £ 1.80 billion.

The stock attempted to rally on Monday, 5th of October, trading up by 6.65%, but there was no real follow-through thereafter. 

CMCX is buy-rated among the analysts that follow the stock. 

RBC reiterated its buy recommendation and 760p price target in mid-August; the stock is trading at 658p as I type. The company is due to report on November 26th. 

It recently announced the launch of CMC Funded, a specialist prop trading business, which it hopes will nurture what it calls trading talent. The business will draw on CMC's technology and trading insight. 

As well as wanting to know how the markets business has traded, investors will be keen to hear about developments at CMC Connect and CMC CAPX, which are both B2B businesses within the group. 

In the past, CMC has struggled to contain its cost base, but it should now start to see economies of scale as Aussie bank Westpac migrates 450,000 retail customers and AUD 39.0 billion of assets onto the CMC platform.

CMC continues to diversify both vertically and horizontally with the trading and markets universe, which should differentiate it from its rivals over time.

AJ Bell AJB LN 

AJ Bell is now the largest listed UK D2C investment platform. It will publish a year-end trading update on October 22nd and report its full-year results on December 3rd. 

Its previous trading update was out in early July; among the highlights then were solid customer growth of 39000 in the prior quarter that took total customer numbers to 762,000, an uplift of +5.0% in the quarter and an impressive +23.0% growth on a year-over-year basis. 

Assets under administration also grew strongly YoY by +26.0%, and net inflows were higher by +46.0% in that period.

Deutsche Bank wrote on the stock in September, saying that: “The group continued to report strong D2C customer growth driven by “marketing momentum,” which included a brand refresh, and that the lifetime value of the firm's customers continued to be in excess of the cost of acquisition. 

I would suggest this is the most important KPI in a high-volume financial services business.

Given that positive ROI, or return on investment, Deutsche believed that AJ Bell was likely to increase spending on marketing for 2027, though not at the expense of the firm's internal target of a 40.0% PBT or Profit Before Tax margin.

If AJ Bell can continue to attract new customers and retain healthy pre-tax margins, they could easily justify the bank's 700p price target, vs the current 575p price 

Of course, AJB don't have the field to themselves; Hargreaves Lansdown may be under private equity ownership these days, but it's still active. Aberdeen-owned Interactive Investors is also a threat, and it remains to be seen how Evelyn Group, now part of NatWest, will be able to leverage its access to two private banks and millions of current account customers. 

A|J Bell trades at a forward PE of 17.27 times according to Barchart and has impressive return on equity and return on investment ratios of 59.90% and 43.10%, respectively. 

The share price is up by +124.0% over three years and by +30.00% year-to-date. Earnings growth has been steady rather than spectacular, with revenues and earnings growing by just over +20.0% each over the last five years.

However, if they have found a marketing sweet spot, then those numbers should soon start to tick up.