Client Centric Aproach for Brokerage Business Essay

Client Centric Aproach for Brokerage Business - Essay Example For business such as brokerage firm, it becomes more important that they should evolve and embarrass client centric approach because by building long term relationships, the firms can achieve the necessary breadth and focus on its customers to achieve strategic superiority but also gain necessary competitive advantage over their competition. It is therefore very critical that the firms involved in business which requires different and potentially sensitive relationships with the clients, a client centric approach would be a viable and effective alternative to achieve the strategic objectives. However, such approach require a collaborative approach since engaging with the client from the initial stages of registering as a client to the process of conducting business through the brokerage firm requires a very focused strategy to develop effective relationships with the clients. This paper would attempt to understand and analyze how the client centric approach would allow a brokerage firm to gain client assets/share of wallet. The focus of this paper will be two fold. First it would discuss what the client centric approach is and secondly its application on the brokerage business will be studied. A brokerage firm acts as an intermediary between the buyer and the seller, typically in a stock market. Due to peculiar nature of the stock exchange functioning, there is a greater need for the financial intermediaries who play the role of a link between the buyers and the sellers so that the exchange against some consideration can take place. A discount broker is a person who carries out the business of buying and selling at much reduced commissions and fees etc. The purpose of the stock broker therefore is to address that segment of the market which could not otherwise afford the usual high rates of the brokerage firms which provide similar services. In doing so, firm tend to attract bulk of the small investors especially who due to lack of capital. The focus of such investors therefore always remains on reducing the transaction costs so that they can maximize their profits. Firms offering such services therefore tend to be generalized in nature as they offer services which are hardly differentiated therefore such firms need to develop their specialties based on pricing as well as non-pricing factors. Since such types of firms are offering discount services therefore they are already leading in that area however, non-pricing factors include the use of different and innovate means of attracting and maintain customers. Being client centric is one such mean through which such type of firms attempt to attract clients. In order to assess the client centric approach being adopted by discount broker firm, we must also understand as to how the discount firms perform their jobs. Discount firms do not offer advice to their clients and simply sell out whatever you have therefore this reduces their spreads and offer services which are discounted. It is also argued that the discount brokers are used by the experienced investors who can do their own research and only