With a positive operating environment prevailing in the securities industry, the credit rating outlook for large brokerage firms, retail wealth managers and other securities firms is neutral heading into 2026, says Fitch Ratings.
In a new report, the rating agency said that its outlook for North American and European securities firms is neutral for the year ahead, with “solid core earnings, improved business diversification, sustained leverage discipline and robust liquidity” underpinning firms’ credit profiles.
“We expect operating performance for North American and European securities firms in 2026 to remain supportive of current ratings as strong investment banking activity persists, supported by improving M&A pipelines and favourable financing conditions from Fed rate cuts,” said Ben Schmidt, senior director, non-banks, North America at Fitch, in the report.
“The pro-business stance under the new U.S. administration and reduced regulatory scrutiny should support healthy market activity. However, limited predictability of global trade policies introduces risk to transaction volumes and cross-border deal execution,” he noted.
Against that backdrop, the outlooks for most of the securities firms that Fitch rates are stable, it said, “reflecting established franchises, appropriate leverage headroom, adequate liquidity, efficient cost structures and solid risk management frameworks.”
“These factors continue to support rating profiles despite global trade policy uncertainties and technology-driven improvements impacting on operational efficiencies,” Schmidt said.
Within the industry, the large, integrated broker dealers, “will benefit from lower funding costs and improved risk appetite, supporting equity and debt issuance,” the report said. “Trading revenue should remain robust but expand at a more modest rate as interest rate volatility normalizes.”
For retail-focused brokers and wealth managers, net interest income is seen coming under pressure, but this will be mitigated by continued growth in fee-based revenues and assets under management, it noted.
“Advisor recruitment remains highly competitive amid ongoing regulatory scrutiny of digital engagement practices, compliance and AI-related risks,” the report added.
Finally, Fitch said that the operating performance of interdealer brokers and electronic market makers, “may moderate from recent highs as market volatility normalizes.”