While the pandemic has wreaked havoc across much of the UK’s business, retail companies are in the pink.
It is estimated that households have built up around £ 100 billion in extra cash for the lockdown as expenses on everything from travel to meals have evaporated.
Many of these “accidental savers” have been looking for ways to use that money – and with interest rates at record lows, the volatile world of financial markets has become an enticing alternative.
The IG Group, headed by banker June Felix (picture), one of the few female managing directors of the FTSE 250, recorded an increase in its active customer list from 133,800 to 207,000 last year
This week, an update from online retailer IG Group showed how it has benefited.
The number of active customers increased from 133,800 to 207,000 last year and trading volume rose 66 percent to £ 416 million in the six months to November.
Even when nearly 2,000 employees were forced to retreat from their city offices to their homes during the lockdown, employees received a £ 42 million bonus round in April.
The £ 3 billion group has come a long way. It was founded in 1974 by financier Stuart Wheeler on the top floor of his Chelsea home to bet on the price of gold with his friends.
Wheeler, an avid gamer who used his bridge tournament winnings to surprise him during troubled times in his youth, grew IG into a trading firm where investors could place bets on a wide variety of assets.
And although it started out as an old boys’ club used by Wheeler and his friends around town, it’s now a global trading firm run by banker June Felix, one of the few female directors on the FTSE 250.
When Felix, 64, started as head of IG in 2018, she set a strategy to position the company globally and diversify the products on offer so that customers can invest more of their money through their platform.
And while Felix insists the strategy is going well so far, she is quickly able to not accredit all of IG’s recent strong accomplishments for her changes.
The increase in household savings as people spend less money during lockdown while closed in their homes is “definitely a factor” in commerce, according to Felix. However, she adds that the extremely low interest rates have also spurred activity. “People are looking for ways to use their capital,” she says.
The volatility the pandemic caused when the FTSE collapsed as the coronavirus hit and bond yields fell to record lows also piqued new clients.
According to Felix, IG has had a record number of visits to its education websites IG Academy and Daily FX in the past few months. The average monthly visits are now around 3.5 million compared to 1.5 million a year ago. “People want to learn,” she says.
Trading in the 30 minutes following the announcement of the Pfizer vaccine, which sparked a feeding frenzy among investors and boosted the price of troubled UK stocks, was 10 times higher than the last 30 minutes, indicating the number of people who dated Coronavirus were lured onto the market.
Player who made IG a giant
Stuart Wheeler founded IG in 1974 and was still an influencer at the company until his death at the age of 85 that summer
Stuart Wheeler founded IG in 1974 to bet on the price of gold and was still an influencer of the company until his death at the age of 85 that summer.
A love of bridge and gambling was the inspiration for IG when Wheeler (pictured) was a young city worker – and made him a fortune.
As a city veteran, he became a prominent supporter of the Tory party and donated £ 5 million in 2001 to support the campaign of then-leader William Hague.
Wheeler spent his early years in an orphanage before being selected by Captain Alexander Hamilton Wheeler and his wife Betty. He attended Eton College and studied law at Oxford University.
With his bridge profits, he started IG with £ 30,000 from his friends. He married Tessa Codrington in 1979 and the couple had three daughters, including model Jacquetta Wheeler.
And the fact that IG has allowed clients to trade on weekends when underlying markets like the London Stock Exchange are closed was also positive during the pandemic, with the government making many of their political announcements on a Saturday or Sunday.
Felix notes that IG products are not for everyone. The services are more complicated than buying stocks or funds through an online platform like Hargreaves Lansdown or Interactive Investor. Although investors have more opportunities to develop their own trading strategies, it means more opportunities to lose.
For this reason, and to stay on the good side of the regulator, IG is aimed at more discerning investors. The typical customer is a man between the ages of 30 and 50 who is wealthy and has had a career in financial services.
But Felix, one of the few women in a male-dominated industry, is determined to expand the diversity of the IG.
She says, “I’m trying to run a meritocracy. We make sure we are gender and color blind when hiring, and my executive committee has four out of nine women executives. ‘
Felix, a native of Pennsylvania whose parents immigrated to the United States from China, has a world-class degree in chemical engineering. However, she points out that many young girls are discouraged from pursuing careers in math or science.
“That has to change,” she says. Her own son “has his mother’s math skills,” she laughs, and now works for a sustainable energy company in the trendy California town of Palo Alto.
During the pandemic, Felix focused on making IG an attractive place to work for all employees. She continued to hold virtual meetings with colleagues around the world and launched a “Walk the World” initiative with colleagues.
The idea is for IG employees to go for walks indoors and outdoors every day and eventually travel the distance from San Francisco to Melbourne. Each office is hosting a virtual event to tell employees about their city and how they deal with the pandemic.
So far they have covered more than 4,500 kilometers and are on their way to Europe.
IG investors and customers hope that Felix’s expansion plan will continue at the same pace.
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