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First step - increase pay and change the rules

How to make dealing an attractive profession?

When I became a journalist with BT 22 years ago, it was the dream of many people to become a dealer in a stockbroking firm. The job held many attractions and commanded respect with the investing public. Today, this doesn't apply any more; if anything, you'd be hard-pressed to convince anyone that becoming a dealer/trading representative is a worthwhile career. The phrase "this is a sunset industry'' has been used quite frequently to describe stockbroking - commissions are 80 per cent lower at an average of 0.2 per cent, volume has shrunk drastically this year, the Internet has made online trading more popular and because of poorly regulated selling leading up to the Lehman Brothers' debacle in 2008, the rules have been tightened to the point where remisiers cannot give advice and appear to be no more than simple order takers.

As a result, many manage their own money instead of servicing clients - one said to me : "it's really not worth my while, sweating over whether my client can pay his contra loss or giving advice and running the risk of being fined, all for a measly 0.18 per cent''. If there is no incentive for remisiers to give good service to their clients, would it really come as surprise to find that retail presence in the local market has almost vanished?

In today's Hock Lock Siew I wrote that there should be some scope for remisiers to give advice. After all, every circular sent to shareholders when companies make new proposals that require shareholder notification and/or approval carries the sentence on the front page that if in doubt over what to do with the proposal, shareholders should consult (among other experts) their stockbrokers. Yet the rules under the Securities and Futures Act forbid remisiers from providing financial advice. Clearly there is a contradiction here and  the rules need to be revised (or reinvented, as today's HLS headline says) to give remisiers greater leeway to service their customers.

This will take some time though and until then, the current 60-40 commission split between remisiers and their houses should be changed to 50-50 as a basic starting point. The 60-40 arrangement has been practised since the 1980s and is sorely in need of change.

 If it is altered to 50-50,  it would be the first step in making the profession attractive again.