07 March 2018
Fixed-assets
Online brokerages will dominate stockbroking
The broking business is surely moving the online way, says Saurabh Mukherjea, CEO, Ambit Capital. going forward the broking business will be dominated by online discount brokerages, given the growth rates shown by the top 3 online brokers, according to Mukherjea.
In a special address at the Outlook Money Conclave 2018, Mukherjea, said lower cost of investment and lesser churn was the key to generating that incremental return all other things being equal.
This incremental return, also called alpha was important because only 3 out of 100 active equity funds gave an alpha over a time horizon of 9 years making a case for more investments in tracker funds, which according to Mukherjea would rule the fund management industry.
These fund managers who have generate alpha for the last nine years would be ones
to set up boutique fund houses which will be known for their strong stock picking capabilities and differentiated investment styles.
As a result, the number of intermediaries would greatly reduce and only genuine wealth advisors would remain.
Transparent, low cost, high quality investment and asset allocation strategies (such as the Coffee Can Portfolio devised by Mukherjea) will become the norm, he concluded.