Financial services Jan, 08 2014

Franchise for financial benefits

By Ekta Sharma Verma, TFW Bureau
Franchise for financial benefits

After launching its franchise business in 2003, ICICI Securities expanded its market in every nook and cranny of the country. In a tête-à-tête with Ekta Verma, Max Menezes, Vice President & Head Business Partners, ICICI Securities Ltd shares his brands expansion plans and the opportunities offered.

How did ICICI Securities begin its journey?

ICICI Securities was established in 1995 as a wholly-owned subsidiary of ICICI Bank. It was set up as an integrated securities firm to provide wide range of services including investment banking, institutional broking, retail broking, private wealth management, and financial product distribution. Our diversified set of clientele includes corporate, financial institutions, high net-worth individuals and retail investors.

Among all the services that ICICI Securities offers, one of its important services is online broking that is offered to over 2.7 million customers. For the past decade, this website has been empowering retail investors as well as offering convenient ways to invest in equity, derivatives, currency futures, mutual funds but also other services like distribution of fixed deposits, loans, tax services, new pension systems and insurance are available.

Amid the success of the online trading platform, ICICI Securities launched its franchise business in the year 2003. The demand for trading and investment was growing in the smaller cities, but there was very limited place where a retail consumer would get his entire investment requirement met at one place. The lower penetration of internet and the limited financial knowledge in these markets propelled us to start the franchise model in these places.

How does ICICI Securities franchise? What is your franchise model?

We have 212 owned outlets in the tier I cities known as ICICIdirect Stores. Our franchisees cater to the tier II and the rest of cities and towns. The model is a perfect fit for the local entrepreneur in these cities who wishes to start franchise in financial markets with minimal capital investment and infrastructure cost. ICICI Securities operates with one of the lowest franchise fee structured in and across the industry. The objective for the low entry fees is a part of the strategy - to be the most accessible and trusted brand name in the remotest of the villages and towns of our country.

ICICI Securities is present in over 428 locations through franchise network of 1050 outlets. While the internet penetration in India is still in its early stages, our franchise operates in offline mode in these small towns. The customer places an order over the phone, or in person with our Sub Broker (Franchise), who executes the same though his trading terminal. The franchisee also provides service and support to his customer.

What is your USP?

ICICIdirect has been the pioneer in online broking in this country and is the preferred online platform for investment and trading for 2.7 million Indians.  We have a unique 3-in-1 integrated account concept where in settlement of funds and securities takes place through linked savings account and demat account.

Some of the first-of-its-kind services were – online transaction details, FuturePlus, StopLoss, ValidTillCancel, and the recently launched eVoting, which allows shareholders to vote on important company resolutions.

What kind of franchise opportunity are you offering?

We offer two types of franchise opportunities. These are as per the skill set and experience of the entrepreneur. For the beginners in financial markets we offer “Investment Associate” (IA). The IA can offer all products available in our trading platform to his customers except Equity and Derivatives. The joining fee for IA is as low as Rs 7000. Prior experience in financial markets is non mandatory. We have people working in corporate joining us as IAs. They wish to capitalise on their contact base and provide investment solutions to them. Every individual has some surplus income to invest every month, however small that might be. The IA helps these customers to direct their hard earned money to instruments offering higher returns.

We also offer partnership opportunities to experienced individuals and firms as “Authorised Person” (Sub Broker). They can distribute equity and non-equity products to their customers through their outlet. These franchisees are required to have infrastructure and certifications in equity markets to be eligible to associate with us.

What kind of training and support do you provide your franchisees?

Every franchisee, joining us is given two day induction training at our zonal office, where the product, process, outlet management and business strategies are discussed in detail. We have a dedicated in house training team for this which conducts periodic product training of sub franchise and franchise customers as well. This is imperative to get our new franchisee’s establish their business. Outlet inauguration is mandatory for our franchise outlets. Being in retail business, the launch of an outlet plays an important role in spreading the awareness and availability of investment solutions in the neighbourhood.

Promotional support is given to every franchisee through marketing collaterals, promotional material for customer acquisition and relationship building activities. Research support – Sub brokers are supported by research from the award winning research team at ICICI Securities.

What is the criterion for partnering with franchisees?

Financial Services industry is a knowledge driven industry and requires high integrity and service orientation from the franchise. Hence, our channel partner selection is based on these parameters. Authorised Person is required to have Graduation in any discipline; experience in financial markets is a must. They are also required to have NISM certification (capital market certification) post joining to start the business. We give preference to entrepreneurs having well established retail business in any sector.

Which all cities are you tapping for expansion?

We see growth coming from the underserved markets like tier III and IV cities and towns; hence our focus is primarily on these markets.

Franchise facts

Area  Investment RoI Breakeven Total franchisees Target
200 sq ft and above Rs 2-3 lakh 30% 18-24 months 1050 Channel Partner and 3600 IAs 1400

Related: A venture of benefits

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