Trading reps should now raise their game and elevate service levels

EVER since the stock market started deregulating in the late 1990s, trading representatives (TRs) have complained about the diminishing attractiveness of their profession.

This perception arose out of three significant changes that the industry has had to grapple with over the past 17 years and is said to have prompted an exodus from TR ranks - full deregulation of broking commissions that had led to a fall from a standard one per cent to an average of about 0.2 per cent now; the removal of the midday break in 2011; and the tightening of the rules governing permissible financial advice that were imposed after the US sub-prime crisis of 2008 in order to prevent mis-selling of sophisticated products to naive retail investors.

According to conventional TR wisdom, these developments meant that TRs who were once viewed as valued financial professionals were now relegated to being simple order takers whose incomes were cut by about 80 per cent, who were expected to work throughout the day without a break and were unable to tap their years of experience by providing useful answers when asked questions by their clients. As far as lower broking costs are concerned, there is no turning back. Stockbroking, like many other businesses, has been technologically disrupted and there are numerous online platforms which now offer worldwide trading for razor-thin fees. This is unavoidable financial Darwinism - brokers here have had to either adapt to compete or lose business.