If you’ve visited our UK stockbroker comparison page, you’ll be stunned by the number of firms competing for your stock brokerage business in the UK. As a British private investor, you are spoiled for choice. But have you ever wondered why there are so many stockbrokers in the UK?

In our deep dive into how many stockbrokers there are in the UK, we concluded that there are 94 notable firms, but up to 20,883 if small enterprises are included in the total. 

In this article, we’ll cover each significant factor that has resulted in the abundance of stockbrokers and investing apps in the UK. Such as these brokers which we think are the very best:

Why Are There So Many Stockbrokers in the UK?

History matters

Rather than looking at conditions in the UK right now, it really pays to take a retrospective look at why many of the old firms that are still in business today got off to such a great start: 

If you’re not familiar with the history of the London Stock Exchange, here’s a brief summary:

The LSE brought together and formalised the trading of shares between private individuals taking place at many locations across a booming industrial London in the 18th Century. 

300 years on, London is still one of the beating hearts of the modern global financial system. 

Clients in countries around the world use UK firms to conduct their financial affairs. This level of exporting can sustain a far higher number of firms than the general population of the United Kingdom need for their own consumption. 

The reputation of large UK banks, brokerages and asset managers helps to draw in talented finance professionals from around the world. This pool of talent acts as a competitive advantage for British stockbrokers, over their European rivals.

London is a fintech hub

There have been many disruptive changes to the way stockbrokers operate in the last few decades, but the latest is surely the arrival of the iPhone and the app ecosystem. 

A flurry of start-ups providing saving and investing apps have appeared in the UK since smartphones opened the door to a ‘broker in your pocket’. 

That has been helped by a vibrant venture capital and fintech scene in the UK. While TV programmes such as ‘Dragons Den’ give the public a glimpse at the desperate process of founders pitching for financing, the reality is that hundreds of finance-related apps are funded and developed every year in the UK. 

Only a few have emerged as major successes, (think Plum, FreeTrade, Nutmeg, Moneyfarm and Trading212), but these are enough to ensure that British stockbrokers have grabbed a sizeable portion of the market share. 

Education

The UK hosts some of the most prestigious education institutions in the world. 

From world-topping universities such as University of Oxford and the University of Cambridge, to dedicated business schools such as London School of Economics and London Business School – undergraduates through to MBA students benefit from the historied institutions each year. 

And after graduating, many international students simply choose to never leave the UK. Instead, some become stockbrokers and begin to work for firms that serve UK clients. 

The cultural significance of finance in the UK

Money is sometimes seen as a taboo subject at the dinner tables of many British households, but money still gets people talking among family, friends and colleagues. 

Personal finance expert Martin Lewis has become a mainstream icon, promoting straightforward and savvy tips on savings, which has inspired a league of financially-minded adults to take the reigns of their personal finances. 

Then there’s the proud tradition of financial journalism in the UK. The trademark salmon-pink shade of the Financial Times can be seen at the front of any quality corner shop. Meanwhile, among weekly magazines, The Economist can claim more readers and social media followers on LinkedIn than any similar.

This, and the fact that one of the world’s most known stock markets exists only a few miles from their house, all contribute to an omnipotence of investing among UK citizens. 

To be clear – not everyone invests. But after necessary pension reforms that have seen workers being ‘auto-enrolled’ onto workplace-defined contribution pension schemes, the vast majority of working adults now have exposure to equity investments in one way or another. 

So if you’re wondering why there are so many stockbrokers in the UK, you can begin your search for answers by discovering the sheer number of investors there are in the British Isles.

Why Are There So Many Stockbrokers in the UK?

To summarise, the reasons for the vast number of UK stockbrokers is that:

The City of London exports brokerage services to foreign markets, resulting in an industry that operates at an international, rather than local scale. 

The educational institutions and the reputation of London as a financial capital acts as a magnet for highly educated individuals that become the staff of growing stockbrokers. (Read more: Top stockbrokers to work for).

Finally, the UK is full of investors. You’ll struggle to get to the bar at any pub without walking past a property investor, a savvy saver or a stock market investor. Thanks to the steady rise in property values, many UK investors have become millionaires, and use stockbrokers to invest in a diversified way for their retirement.