The UK wealth management sector’s revenues and profit margins both increased during the first quarter of 2020 despite the advent of a Covid-19 induced lockdown and a precipitous fall in global equity markets, according to the latest data released by London-based research firm Compeer.

Total revenues generated by the wealth management firms and execution only (XO) stockbrokers included within the Compeer universe came in at a record £1.89 billion.

This is 2.6 percent higher than the £1.84 billion reported for the fourth quarter of 2019 and 7.1 percent higher than the £1.76 billion reported for the corresponding quarter in 2019.

Despite investment assets falling below the £1 trillion threshold as the FTSE 100 fell by over 30 percent in less than four weeks, a huge surge in trading activity more than compensated for any reduction in investment management-related fees during the quarter.

Investment assets managed or administered by the Compeer universe of wealth managers and XO stockbrokers amounted to £914 billion.

This is 13.3 percent lower than the £1.05 trillion recorded at the end of December 2019 and 8.4 percent lower than the £998 billion posted at the end of March 2019.

Despite the severity of the fall in percentage terms it is still much lower than the fall experienced by the main market indices.

This reflects the fact that although an important constituent of portfolios, equities are not the only component.

Moreover, although asset values fell during the quarter, especially during late February and March brokerage-related activities surged as opportunistic investors attempted to take advantage of the bargains on offer.

Read related: The UK wealth management firms well positioned to survive and grow in the aftermath of Covid-19

Client trades at participating firms within the Compeer universe surged to 11.2 million during the quarter, a 60.3 percent and 76 percent increase on the volumes recorded on the previous quarter and the corresponding period in 2019.

Self-directed retail trading activity also increased significantly during the quarter. At 4.07 million these were 43.9 percent and 63.3 percent higher than in the previous quarter and first quarter of 2019 respectively.

XO stockbrokers were almost certainly the main beneficiaries of this trend. And this helped this sub-sector to increase its profit margins by 2.3 percentage points during the quarter from the 50.0 percent recorded for the fourth quarter of 2019 to 52.3 percent.

Brokerage-related revenue increases were muted at wealth management firms.

Nonetheless, a four percent fall in costs, possibly helped by the introduction of the UK government’s furlough scheme helped them boost profit margins as well, although at around 23 percent they are lower than the level achieved in the corresponding quarter in 2019.