You May Serve Yourself Or Can Take The Help Of A Broker, Depending Onyour Trading Need And Budget
Posted: May 14, 2016
There are some really successful stock brokers in India who have unbundled the offerings of the full service providers and have concentratedon specific sources of value to investors. They have also started investing time and money in developing direct channels to circumvent the physical footprint advantage of the established players at a time when consumer adoption of electronic and other forms of direct access has started replacing the need for face-to-face dealings. Paced by technological advances that made "self-service" a reality, as well as by a rising level of investor sophistication, the trend toward specialization has gained momentum. Simultaneously, we can see a rise in the number of individual investors in mutual funds and employer sponsored 401(k) plans. Considering this, the specialized firms have started focusing more and more on specific sources of value to address targeted customer needs, fostering the perception that their services are cheaper. These specialized providers have enjoyed significant growth at the expense of the full service firms. In past few years,the market share of discount brokers has increased to a large extent.
By unbundlingcheap brokerage services, specialized providers have been able to appeal to specific investor groups, particularly the self-directed investors. In using specialized providers, these customers reduce their overall cost of investing by accessing only the services they need, primarily transaction execution. To obtain investment selection advice, this group pays directly for financial periodicals and research material. Such advice is usually available at no additional charge as part of a full service firm's package of services. But the price differential for transaction execution makes the specialized provider a much more cost efficient choice for the self-directed investor than a traditional full service broker. Further increasing their allure to the more sophisticated investor, specialized providers have aggressively expanded the use of technology for distribution of, and access to, their products and services. Phone-based services and online trading, for example, have been utilized most effectively by these providers to gain market share among active, savvy customers.Investors who are less self-directed and more concerned with developing and executing an in-depth financial plan are more likely to realize value from a full service provider. The costs of preparing a financial plan and obtaining asset allocation and investment selection advice on an unbundled basis quickly level the playing field between specialized and full service providers if the customer invests largely in load mutual funds.
I am author of this article. I write this article on behalf of Bezel group. It provides you Best Broker, Online Stock Broker and Discount Brokers.