With increasing per capita income and wealth, there needs to be a way to manage the earnings.
In a hectic lifestyle, where financial management is difficult to achieve personally, need of those who can help one do it, arises. We give you a lowdown on financial services sector along with franchise opportunities available. Here's your chance to make money as you manage money.
Financial services refer to services provided by the finance market. It is also the term used to describe organisations that deal with management of money for e.g., banks, investment banks, insurance companies, credit card companies, stock brokerages, credit unions, accountancy companies, investment funds and some government sponsored enterprises.
These firms provide a variety of money and investment related services and on a whole, financial services are the largest market resource within the world in terms of earnings, as per a recent report.
As the market gets more diversified, financial services aren't limited to just the field of deposit-taking, loan and investment services, but also include fields of insurance, trust and agency services, securities and all forms of financial or market intermediation including the distribution of financial products.
ICICI Securities Ltd (I-Sec) is a leading player in financial services offering wide and innovative products to its customers. The brand ICICIdirect.com was one of the first few brands in online brokerage services in India and serves as an online platform for investment and trading for three million Indians. ICICIdirect.com offers online trading platform to its customers through its unique three in one account.
From franchise perspective, the brand is focused on developing its partners in a way that they understand the nuances of managing their business right from the establishment stage to expansion stage.
Into franchising since 2003, ICICI Securities Ltd's franchisee network has more than 867 channel partner outlets today, serving more than one lakh customers. The Investment Associate (IA) Channel started in the year 2011, has grown from strength to strength and has 3,700 IAs today, catering to more than 15,000 customers. With both these distribution channels, the brand is present in more than 590 cities.
Another lucrative opportunity to enter the financial services sector comes from Sykes & Ray Equities (SRE).
SRE is one of the foremost retail stock brokerage service entities on the country's two major exchanges. It has strong presence in over 140 locations across India through a network of business associates and branches. The company has also endeavoured to reach out to Indians across the globe by setting up an independent NRI Desk.
Into franchising since the last 15 years, SRE envisages a good future for the potential franchisees.
“Our team caters to all the sections of the society, helping them and making their money work for them. Financial services in India will further expand via franchising as India is one of the fastest growing economies in the world and the potential of its people to invest will be tremendous in the future,” says Jaishank Gupta, Strategic Advisor, Sykes & Ray Equities.
Incorporated in 1997, Angel Broking is one of the leading and respected stock broking and wealth management houses with its unique retail focused business model. Angel is a strong player in the franchise space with a growing strength of more than 8,500 partners. The brand supports its partners by giving them a robust platform to trade, manage risk and manage the back-end operations in a transparent manner.
Franchising since 2012, Eternity Financial Services is a total financial solutions provider which brings deep industry experience, innovative service offerings and next generation delivery to its customers.
“We provide knowledge sessions, offline and online training to our franchisees and clients. Our brand is well known for various derivatives strategy products and comprehensive research. Our franchisee need not be an expert in technical knowledge, he can consult us for any such query that may occur,” says Kapil Goenka, Proprietor, Eternity Financial Services.
A look ahead
With a new government at the centre, the financial services sector is looking forward to a slew of reforms and measures that will boost the business in the coming years. The industry players are reposing faith in the new regime and are bullish about the business and revenue in the near future.
Sykes & Ray Equities: The momentum is gearing up in the sector at present. With new policies in place for development, we can expect substantial growth. Finance sector is looking very bullish for the next 10 years and hence we can look forward to a healthy growth of the economy overall in the coming years.
Angel Broking: With a stable government at the centre, we believe that India has the potential to have a higher growth trajectory. Government's push towards disinvestment, policy pro-activeness and aim for financial inclusion along with measures to simplify KYC norms will lead to higher retail level participation in the market. Looking at the current demat account penetration of 2 per cent as compared to China's 11 per cent, we feel there is immense opportunity for the financial services sector to grow. With the advent of technology, market information is now available to people in tier II/III cities as well.
Eternity Financial Services: In the coming years, our economy will be taking a new positive shape. The financial services industry will out-perform all the industries and will step up into a remarkable size. Awareness and knowledge among masses will play a very important role in improving the performance of companies in the sector.
For India, a growth of 6.75% per annum is achievable over the next 10 years, which would translate to a $5 trillion economy by 2025. Financial Services will be an integral contributor and hence beneficiary of this growth. It is assumed that this sector will also create around Rs 3-5 lakh jobs in next five years. Money will reach common people and so the outflow will increase resulting in development and re-construction of the economy.
The future may look bright but there are challenges that need to be addressed. Financial services providers work under a challenging scenario. They battle uncertain market conditions, fear of sharp risk involved and regulatory pressures. It is within such a volatile environment, that these companies grow and also aim to enhance their customers' wealth.
If you are looking for an opening in the financial services sector, you must make yourself aware of the challenges that the industry is facing at present.
= Low level of financial literacy: According to India Advisory Board's recent report, there are close to 2.5 million financial product advisors in the country. But there is dearth of those who actually understand the concept of the financial product that they are selling. Also, many customers are still not aware of exactly what they are getting into and how will their product work for them.
= Unclear regulations: Often unclear regulations and ambiguous guidelines act as an impediment in financial services sector. This is a big hurdle that needs to be crossed.
= Shallow talent pool: Financial services businesses require high quality, intelligent people. The industry attrition rate is very high which makes it a challenge to build sustainable institutional capabilities.
Pressure on margins and issues affecting profitability are the factors that make financial services vulnerable to an incoherent scenario. To capitalise on vast opportunities available, one needs to manage the challenges understanding the dynamic operative environment of the industry.
Pre-requisites for being a financial service franchisee:
= The franchisee requires basic knowledge of financial markets
= Basic certification for various exchanges
= Should be able to create his client base
= Should be able to guide his clients to take financial decisions, if necessary