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May, 13 2010

BRICK & MORTAR TO WEB

INTERNET has changed our lives and redefined the way we do business. It has opened up a plethora of opportunities in the brokerage sector, providing the customer with many options to choose from. The ability of the broker to attract new clients will depen

INTERNET has changed our lives and redefined the way we do business. It has opened up a plethora of opportunities in the brokerage sector, providing the customer with many options to choose from. The ability of the broker to attract new clients will depend upon their ability to deliver the following:

  • Superior customer service
  • Low brokerage rates
  • Quality research
  • Suite of products
  • Seamless trading platform

Once the customer chooses the brokerage company as an intermediary to invest in the capital market, the brokerage company provides the customer with a platform to invest online or through an offline medium.

The advantages of an online trading medium are:

Instant access: You have access to your account all the time.

Trade from anywhere: You have the liberty to enter the trade online from anywhere and anytime, which is very convenient when one is travelling.

Choose your brokerage: Many brokers offer customised brokerage rates based on the trading pattern. In case the customer is a high trader, he can avail low brokerage rates.

Ease of trade: Speed of execution is the main advantage of online trading. Brokers have invested in developing cutting-edge technology to ensure that they offer world-class trading platform, which is simple and easy to execute.

Choice of products to invest: With the technology evolving so rapidly, the customer has many investment options. He can invest in investment products like mutual funds, IPOs, currency and commodities on a single platform, thus reducing touch points for investments to a single point. The availability of multiple products under a single umbrella has seen a growing number of users taking up the online platform. Companies are transforming their operations and strategies to cater to the increasing needs of the clients.

However, investing online comes with its own set of risks. The client has to investigate the brokerage company he wants to invest in, the terms and conditions, quality of research, service standards and robustness of the trading platform. The key areas of dissatisfaction in online trading are lack of security and information on how to trade online, absence of human interface to solve queries in case of any problem, etc.

In spite of all the convenience that online trading offers, there are customers who prefer the traditional method of offline trading.

One of the many factors why a client prefers offline trading is that he has access to dedicated and professional dealers to make informed investment decisions.

There is an interface with someone all the time as sometimes the client prefers to talk to his relationship manager or dealer before making any investment decision. At the same time, offline trading has its own set of issues like lack of transparency, too much paperwork, time taken to execute a trade, lack of information and competitive brokerage rates.

In this dynamic environment where a sub-broker predominately operates in offline model of business, the challenge of acquiring and retaining the client becomes even more daunting. Some of the key challenges faced by a sub-broker are association with a strong brand, offer of a large product suite to cater to the investment goals of different customers, quality research to make informed decisions and support network that offers the best backend systems that would take care of all the processes from account opening, payments and receipts to adequate marketing and training support.

Thus, in the sub-broker model, managing clients' relationships is the key element that drives the business. Since the sub-broker has limited access to resources in terms of sales persons, marketing spends and support systems, it is important that the sub-broker nurtures the relations and builds on it to generate more references.

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