Stockbroker tells clients to avoid Direct Line float

Stockbroker Brewin Dolphin will tell its clients to avoid the Direct Line flotation, according to This Is Money.

Brewin Dolphin financial analyst Jonathan Newman said Direct Line would find it difficult to keep a competitive advantage.

He said that motor insurance was not very profitable and was an easy market to enter. He added that the motor market relied heavily on ancilliary income to shore up profits, but that these are facing regulatory scrutiny.

Newman said: “I do not at present see anything especially attractive in Direct Line beyond an initial bounce.”