Time’s up for white picket fences in retail equity investments

Prabhakar Tiwari

Mumbai-based retail equity investor, Jahnvi Parekh remembers a time when she used to stay glued to her TV, trying to gain an edge in stock markets. Several shindigs and family dinners would turn uncomfortable as a slew of recommendations would be volleyed at her. Now, the 30-something investor is able to enjoy extended holidays, catching up on trade remotely from her smartphone. The mobile app of her preferred broking firm provides her with real-time updates, allowing her to exercise a tighter grip on the investments. She also receives smart recommendations, thus elevating her to be at the top of her game and yet taste the freedom that only advanced technology can offer.

Prabhakar Tiwari

Welcome, to the changing times in the Indian retail equity investments, the ones that ride on the back of digitalisation and advanced technologies, the ones that come bearing the promise of democratisation of reach and access.

For long, wealth building has remained a distant dream for an average retail equity investor. While their ambition may soar high, the flight was daunted with several entry-point barriers such as lack of access, high brokerage fees, amongst other charges. These white picket fences not only reserved the entry for only the privileged ones but also with its archaic and tedious processes, were not a fit for today’s DIY-oriented millennial audience.

However, the burgeoning capital markets space has not remained insulated from the wave of digitalisation sweeping across the nation. With users able to carry superior technology in the back of their pockets, highly promising retail equity investments have now become available at one’s fingertips. In addition, there now exists a lot of avenues for one to access information and educate oneself to make the best out of this segment.

Bidding adieus to high entry fees

At present, the cash market is witnessing growing participation; in the last fiscal, the segment clocked around 88 lakh investors. Credit must also go to certain fast-growing and established broking firms that are collectively removing the entry barriers, especially in the cash delivery segment of retail equities. The market has been buzzing ever since certain established firms announced ZERO cost brokerage services trades executed in cash delivery. Even other segments have been brought to near negligible flat fees, thus getting rid of hidden charges and thereby, removing the white picket fences.

Wooing millennials through technology

In addition to removing the entry barriers of high fees and hidden costs, new-age and tech-driven broking firms have been successful in opening the field to a number of millennial investors through their use of superior tech.

A majority of millennial investors have previously steered clear of retail equity investments, despite finding it a viable wealth-generating alternative, owing to its primitive and tedious processes. In the wake of tech advancements, however, users are no longer required to physically go and open a Demat account. By leveraging the best of digitalisation, trading firms are bridging the gap and meet users halfway, through a screen that they are well acquainted with. It further democratises investments, as DIY-oriented millennial investors are able to easily work through a simple user interface.

Clocking-in new customers by mitigating risks

One would remember the time when stock market trading was at the mercy of industry-wide whispers and hearsays. The first-time traders thus ran a higher risk of being preyed upon by stock market sharks and predators. However, full-service broking firms are now able to leverage technology and mitigate the risks for their customers, thus opening up the segment for more users.

AI is here to materialise the future of stock market trading and with proprietary algorithms, trading firms can process big data sets and offer forecasts that would beat the highest benchmarks in the industry.

The superior technology– and all of its promises– are bundled together in smartphone apps that are accessible round-the-clock and help users easily plan their long-term financial goals. In addition to providing smart advice and expert solutions, such apps also find engaging ways to communicate the most significant information and insights, thus making the segment less intimidating and more fun.

Owing to the changing times in retail equity investment, an upward swing in the number of individual investors hardly comes as a surprise. National Stock Exchange has observed a CAGR of 11% in the past decade, in the cash segment. Furthermore, while asset management companies are handling over 8 Crore folios, around 3.6Cr investors are registered directly with the exchanges, and the total count of EPFO subscribers has crossed 17 Crore. Empowered by the tech advancements and favourable policies of different trading firms, Indians now seem to be bullish on claiming their share and building a rock-solid future via retail equity investments.

Views expressed in this article are the personal opinion of Prabhakar Tiwari, Chief Marketing Officer, Angel Broking Ltd.

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