Currencies

City boss slams Hollywood stars for pushing crypto currencies

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TOP City boss today criticised the celebrities that have been promoting crypto currencies to ordinary folk and admitted the lockdown inspired share trading boom is over.

Andy Bell, founder and chief executive of leading investment platform AJ Bell, said Hollywood actors should not be giving investment advice.

Gwyneth Paltrow, Resse Witherspoon and footballers John Terry and Paul Pogba have all lately been endorsing crypto investment. Matt Damon told viewers that “fortune favours the brave” in an ad for crypto.com.

Analysis shows that those who followed the advice of the celebrities have lost half their money.

The crypto market has soared in popularity with 2.3 million Britons taking punts. Lately, the coins have crashed with $200 billion wiped off their value in a single day last week. Bitcoin, the best known, has halved in six months.

The celebrities have been pilloried for failing to say anything following the crash in the value of what they were promoting.

Bell told the Standard: “It is not helpful, you will never find me advocating crypto, it is fresh air and promises. People invested in good faith. They have lost their shirt, their trousers and their underpants.”

Calls for a regulatory crackdown are growing.

AJ Bell today reported steady half year revenue of £75 million and a slight fall in profits to £26 million.

The lockdown boom that saw hundreds of thousands spend WFH savings on shares has ended.

Bell said: “No one ever thought it would carry on indefinitely. We are seeing dealing activity align with pre-covid levels, dealing frequency has normalised.”

That also suggests the day-trading boom led by apps such as Robinhood may also have had its day.

AJ Bell meanwhile saw customers numbers up 35,000 to 418,000, with most who join its platform there for the long-term.

Recent stock market turmoil should not worry his customers, said Bell.

“Investing is a long-term business. Overtime things will come good. What is the alternative, sell and sit in cash? Sell and try to time the market? That is a fools game.”

AJ Bell is paying a dividend of 2.78p a share, worth £2.6 million to the CEO who is the biggest shareholder.

Shares in AJ Bell are down 40% this year as the City bet that the retail investor boom would wane. They rose 6p to 261p, which leaves the business valued at more than £1 billion.

Bell thinks the recent stock market correction might be helpful to those who think they can get rich quick.

“I hope it is a gentle reminder which doesn’t frighten people off. They shouldn’t run to the hills. It is a clear justification for having a diversified portfolio. A lot of people should be buying funds, perhaps tracker funds, rather than individual shares,” he said.

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