Keeping pace with the times
ASIA WEALTH Securities Co wants to position itself as an investment firm to keep its foothold in the brokerage industry, as technology reduces the number of securities houses and personnel.
“To deal with the stiffer competition, brokerage houses need to adjust, providing developed products and services to fit the changes in their clients’ lifestyle and needs driven by technology,” chief executive officer Pichit Akrathit said in an interview with The Nation.
He said there would be a decline in the number of securities firms resulting from mergers and acquisitions, for several reasons.
First, government has reduced its support for the industry, letting it decline or grow as a function of the market mechanism, after demand from investors for services and products in the capital market rose.
Second, technology will reduce the need for sales and marketing personnel, as there will be many kinds of applications helping clients understand sophisticated financial products more than the marketing people do.
Moreover, artificial-intelligence technology is likely to become a medium for matching shares on the stock market instead of humans as the new generation of investors – who tend to be unwilling to meet with other people – increases.
Third, institutional investors’ needs have changed, as they demand direct access to the stock market without having to go through traders and researchers. This means brokerage fees will be bargained down to very thin margins.
“In short, the industry can survive, but its shape will be changed,” Pichit said.
He urged the authorities to |focus more on development of |the capital market with a wide |variety of products and services, and a large number of players.
“I wish to see more access to the capital market for low-income earners, especially those who live in suburban areas.”
He said that as long as the market functioned normally, there was no need for a regulator to intervene. However, in reality, unwanted behaviour occurred from time to time, such as unfairness among investors, among brokers, and between brokers and investors.
The regulator should exploit the capital market as a channel for companies to raise funds and as an alternative for investors, to serve the country’s economic growth.
Rules and regulations, before being issued, should be quantified as to whether they would cost society too much, he said.
Pichit said Asia Wealth Securities would go along with the global technology-driven trend.
Asia Wealth Securities was known as CIMB-GK Securities (Thailand) until July 2013, when a group led by two families in logistics and automotive businesses, via a holding company called Asia Wealth Holding, took it over from CIMB Securities International. The company holds a full-service securities licence.
Pichit said the brokerage was on track to achieve its goals. It plans to list on the stock market in 2017.
Currently, brokerage fees account for 71 per cent of the company’s revenue, investment banking and financial advisory business 15 per cent, and other services 14 per cent. Its average brokerage fee is 0.12 per cent, in line with the industry. Institutional investors comprise 30 per cent of its clientele and individual investors the rest.
