IG Group Holdings Plc, a retail brokerage powerhouse, announced today that its Chief Executive Officer Peter Hetherington is stepping down from his position and from the Board with immediate effect. However, he will still stay employed by the firm until the end of the financial year to allow for the proper transition of his successor.
The announcement does not clarify why Hetherington is stepping down and where he will head to next. However, it does state that the search for his replacement is well underway. In the meantime, IG’s Chief Financial Officer Paul Mainwaring will take on the role of Interim CEO until a successor is appointed.
Commenting on the departure, Andy Green, IG’s Chairman, said: “I would like to extend our sincere thanks to Peter for his tremendous contribution to the Group. Peter has been pivotal to the success of IG during his many years of service, particularly during the last three years during which he has successfully steered the Company through an unprecedented period of regulatory uncertainty whilst delivering strong earnings and profits growth.
“I particularly commend Peter for his strong ethical leadership of IG and his management of its recent performance. The Company will continue to focus on the delivery of its immediate priorities that Peter has set which the Board believes are successfully positioning IG for its next stage of development.”
Peter Hetherington ends his 24-year career at IG
Hetherington’s departure ends his 24-year-long tenure with the firm, originally joining in 1994. During his career with the firm, he has worked his way up the ranks until he was appointed as CEO in October 2015. According to the statement, in the three years that he was CEO, IG’s profit before tax and earnings per share increased by more than 65 per cent.
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Speaking on his move, Hetherington added: “When I joined IG in 1994 the Company employed fewer than 25 people and had revenues of £16 million and profits before tax of £0.8 million. There are today over 1,700 people working in 15 countries with revenues of over £550 million and profits before tax of over £280 million.
“I wish the Company every success and am proud of the recent progress we have made in improving engagement, diversity and in developing the many very talented people who work at IG. There is a great deal of change underway in the retail trading industry and I have every confidence that this team will continue to drive the business forward successfully in the future.”
ESMA regulation weighs down on IG
Whilst the firm didn’t clarify why Hetherington is leaving the company, it may have something to do with the firm’s future. For IG, historically it’s two strongest regions are Europe and the United Kingdom. However, the recently implemented regulation from the European Securities and Markets Authority (ESMA) has made things harder for brokers in this region. So Hetherington could be jumping ship ahead of difficult times.
Before the regulation came into effect, IG Group expressed disappointment in the leverage restrictions, warning that a number of clients may choose the services of offshore-based brokerages, which are loosely regulated or unregulated altogether. This warning seems to have already come to pass. When the firm announced its first-quarter 2019 results last week it reported that it had experienced a drop in client numbers in the EU and the UK. As a result, the value of the broker’s stock declined sharply in the aftermath of the announcement.
Back in May, the firm predicted this outcome when it estimated that 2019 will see a decrease in year on year revenue. In particular, IG said that if the rules were applied retrospectively, it would have seen a 10 percent reduction in trading revenue