My plan to save UK stock market

Boss of broker AJ Bell tells Jeremy Hunt: Axe stamp duty on shares to boost Footsie

MICHAEL Summersgill is the quintessential Northerner. He was born in Warrington, Cheshire, went to university in Sheffield and now lives in the village of Alderley Edge, home to footballers’ wives and all forms of Northern bling. He even owns two whippets – though no pigeons or ferrets. In typically taciturn Northern style, he refuses to give the names of his pooches, presumably to protect their privacy.

‘My mum even bought me a flat cap when I got them,’ he says with a grin.

Most top investment jobs are in the City, but Summersgill, true to his roots, leads British investment platform and stockbroking giant AJ Bell from Salford Quays, the former site of Manchester Docks. His concession to the capital is visiting a few times a month.

Andy Bell founded the broker in Manchester in the mid-1990s and that suits Summersgill fine. It has the advantage of being close to Old Trafford, where the Red Devils fan can watch Manchester Utd on their home ground. Summersgill, 40, who took over in 2022, has been a season ticket holder since childhood.

But it’s not just about football. Manchester, he says, is an ideal base for a firm that caters largely to British customers, arguing that its attractions mean there is no problem finding talented people outside the City. But in a nod to the Square Mile’s status, the firm retains a sizeable presence there. And Summersgill wants to boost the City’s moribund stock market, outlining his plan to revive the public’s interest in investing.

‘I would propose three things to boost UK investment. One, simplify Isas to make them less complicated. Two, remove stamp duty on shares. And three, provide more support to help people make investment decisions.

‘If you do that, it will create a fundamentally different environment for retail investors in the UK. And it won’t cost a fortune.’

The first objective, he says, is being muddied by the British Isa, unveiled by Chancellor Jeremy Hunt in his Budget last month. The new product will let savers add £5,000 to their annual allowance if they invest it in UK firms. It forms part of the Government attempt to boost London’s stock market, but Summersgill says it doesn’t go far enough.

He argues the problem with the British stock market is not that there are not enough retail investors He says: ‘If you look at the data, 10 per cent of shares are held by private individuals. That has been steady since the turn of the century. It is the pension and insurance company holdings that have sharply declined.’

He fears that, while the objective of the British Isa is ‘the right one’, it will make little difference to the total invested in the

UK stock market. He notes there are only 800,000 savers ‘maxing out’ their Isas, adding: ‘The best scenario is you get an extra £4billion invested a year. That’s a rounding error for the FTSE 100.’ Summersgill is also concerned it will just add more complexity, confusing savers and putting people off investing. Instead, he says the Government should boost demand by scrapping the 0.5 per cent stamp duty levied whenever an investor buys a UK-listed share. ‘It’s a no-brainer,’ Summersgill claims, adding that abolishing stamp duty could reduce fees for customers as platforms compete for business. ‘The benefit would definitely flow to customers.’ Summersgill says the market could also be helped by providing people with support in making investments, rather than focusing on general financial education. An example, he says, is if someone has money in a fund tracking a stock market index such as the FTSE 100 then platforms should tell them if they can switch to a cheaper tracker. He says: ‘Most people want to minimise the time and energy needed to look after their finances, which is understandable.’ Summersgill himself graduated with an economics degree in 2005 and became a trainee accountant. He was soon offered two jobs, one at accountancy giant PwC, another at a ‘funny little business called AJ Bell’. In the end, it was his sister, a pensions expert and ‘the brains of the family’, who tipped the balance. He says: ‘She told me she was seeing lots of people transfer their pensions to AJ Bell and I should go along to the interview.’

When he joined AJ Bell’s finance team in 2007, it focused on selfinvested personal pensions, which were among the first products it launched in the early 2000s. Isas and share dealing accounts followed in 2011 and funds in 2017.

Shortly after arriving, Summersgill was thrown into the deep end as the sector was gripped by the 2008 financial crisis.

But, he says, AJ Bell managed to ‘grow tremendously’ during the period as people continued to look for help with their pension pots despite the unfolding chaos.

‘If someone wants to put their pension in a better place, it doesn’t matter if big US investment banks are going bust or not,’ he says.

His ascent was swift. He became chief financial officer in 2011, with his remit including the role of chief operating officer from 2014, then deputy chief executive in 2021. Over his tenure, AJ Bell has continued to expand. Summersgill helped lead the business to list its shares on the London Stock Exchange in December 2018.

The firm cultivates an unstuffy image – its ads feature the catchy 1979 disco tune Ring My Bell by Anita Ward, pictured inset. At the time of its float, it was valued at £651million. Today, it is worth nearly double that at £1.2billion.

All this, he says, ‘set him up for success’ when he took the reins from Andy Bell, who stepped back in 2022 after more than 27 years in charge. He says: ‘I can’t think of many people that have had a better period of preparation.’

While Andy Bell remains the firm’s largest shareholder and acts as a consultant, Summersgill says his former boss ‘does not want to be a backseat driver’. The founder would also seem to have little reason to interfere. In its last set of results in December, the company posted record figures that saw annual profits surge by 50 per cent to nearly £88million.

When I speak to him, Summersgill is focused on AJ Bell’s ‘busy season’ – the end of the old tax year, and the start of the UK’s new tax year, which began yesterday.

When the deadline approaches, savers usually rush to make the most of their Isa allowance, which allows them to put £20,000 a year into these tax-efficient accounts.

Would including assets such as cryptocurrency on AJ Bell’s platforms draw in more investors?

He says, personally, he is ‘not a fan of crypto’, adding it is ‘one of those dangerous things’ that ‘blur the line’ between investing and gambling. But despite his scepticism, he says if more crypto products are approved by regulators, it could become more mainstream and be considered a safe haven.

‘Could crypto establish itself as digital gold?’ he muses. ‘I can see how that could happen. We’re a commercial business and will be led by consumer demand and the judgments of regulators.’

Turning back to the UK market, he says there has been a renewed focus on retail investors, which has prioritised ‘hobbyists’, people who trade out of enthusiasm.

He likens these investors to ‘Sid’, the fictional focus of the 1986 ad campaign that encouraged people to buy shares in British Gas when it was privatised by Margaret Thatcher. The moniker has made a return recently after the Government announced plans to offload a chunk of its stake in NatWest to small shareholders.

He says: ‘Sid isn’t dead, but those enthusiasts are just one group in the market. Many others are hungry for help and we need to support them if we want to boost the UK stock market again.’

‘Crypto is a dangerous thing – I’m not a fan’

‘We need to make ISAs less complicated’