Most brokerages want to evolve into “asset managers” rather than remain mere trading platforms, said Gurpreet Sidana, Chief Executive Officer (CEO), Religare Broking. In a conversation with Moneycontrol, Sidana spoke about the changing trends, what is next up for traditional players, and how Religare Broking is working on scaling its market share. Edited excerpts of the interview:
On where he sees the broking industry today
According to Sidana, the broking industry has been evolving, especially over the last few years, “including how discount brokers have captured a big market share post-COVID with increased investment." The biggest advantage was for the digital players; they got the maximum number of customers. However, getting a digital presence is no longer difficult. As far as products are concerned, almost everyone can offer a similar product, he said. "Almost everyone will be in a similar situation. The USPs of different players will emerge, and the advantage that digital-only players have will not be there. So, things will change. Innovative leaders will emerge."
While there is a market for everyone, he adds that challenges are there for both; neither traditional nor digital-only players can provide singular services. To earn money, players will have to expand the services they are providing. "Other things have started contributing much larger in terms of the revenue percentage, apart from brokerage," he adds.
On how regulatory guidelines for influencer marketing will impact brokerages
According to Sidana, the growing call for regulation on influencers should not have an impact on the number of accounts, as people who want to open an investing account will do so whether or not they can find a post or video of a finfluencer. They will just reach out to a broker. "It's just that influencers are trying to influence you to go and open the account with a broker that they recommend. So, it creates concentration with some brokers. If there are no influencers, all the regulations become more stringent, and they are not able to misrepresent and influence people to go to a specific broker. They will choose on their own," he says. The only change that could happen is that the concentration of accounts may come down. This could be good for smaller brokerages.
The impact of extended trading hours
"I don't see this as a big game changer for expanding the market. This will obviously have some incremental impact because there are times when people will not be able to trade within that available five-and-a-half-hour window. So, they will get more time to trade," he says. But the appetite of existing investors will remain the same. The benefit is that this will give traders the opportunity to exit or enter a trade at critical times when some major events are happening on a global scale and other exchanges are open, according to Sidana.
What is next for Religare Broking?
Over the last few years, Religare Enterprises and its subsidiaries, like Religare Broking, have undergone restructuring. Sidana says that the firm is now looking to find ways to evolve and scale. While he admits that other players have moved ahead in terms of growth (not size), the brokerage is working on regaining its original leadership position by expanding to even non-broking sources of growth. "We need to become a platform that can offer everything to our investors. Our platform should not be less in any way than any other leading platform."
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Even in the traditional space, they are looking towards wealth management for the upper middle class, as pointed out by Sidana. In the long term, they are looking at listing the stock broking business, but it would need to grow at that scale. But the intent and effort for growth are there, says Sidana.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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