In this blog, you will learn about the Future of Sub Brokership in India.
Even after being the nation with the second highest population, there are only around 7.5% of investors in the country.
Yes, this figure might shock you, but this is what the current stats are telling us. As per recent reports, only 7.4% of the Indian population is registered on BSE to invest and trade.
While this is a grave scenario for the economy, without stock market investments, an economy cannot grow the way it should; on the other hand, this also suggests the huge or, to be specific, unlimited opportunities for sub-brokers in the market.
This article will help you understand the prospects of the sub-broker business and the future trends that are probable in the industry.
Future Prospects of Sub Brokership in India
Check out various prospects which will determine the future of sub broker business in India.
The first and foremost opportunity for the sub-brokers comes from the exponential population in our country.
As mentioned above, only close to 7.5% of the entire population invests or trades in the market, and the remaining still need to put their faith into traditional investments or none.
So, sub-brokers have huge potential here as the level of competition will be lower due to fewer sub-brokers compared to the number of prospects.
Hence, with massive population is still to invest in stock market, this marks a massive growth prospect for the future of sub brokership in India.
Increasing Financial Awareness
While the population is the base of the opportunities that the sub-brokers can get, the real opportunity comes from increasing financial awareness amongst the people in the economy.
If the people do not get financially educated or do not want to invest in the market, then it won’t help the sub-brokers.
So, increasing awareness about different financial products and the stock market and breaking the different myths of investing and trading in the stock market are also boosting the businesses of the sub-brokers.
The financial literacy rate has gone up from 47% to 74% in the last 20 years, and it is also growing rapidly.
This will positively impact the future business prospects of the sub-brokers. The more people are financially literate, the more clients the sub-broker can have.
India is the 3rd largest economy in the world after China and US. It has also beaten the UK in the last year’s race for growth.
This again implies growing income of the people in this country and improvement in the standard of living.
The current GDP of the country is around 7%, even when there are so many geopolitical issues around.
So, this is immense scope for the sub-brokers. As the GDP grows, the country’s per capita income also increases, and thus the opportunities for the sub-brokers can also grow.
As India is determined to become a 5 trillion economy by 2025, the years in between are crucial for the sub-brokers as this is when most of the investments will be put into the market.
It is the next perspective for the sub-brokers to grow their business. The significant increase in the number of retail investors and the level of financial literacy can be attributed to digitalization to a great extent.
With the new-age trading applications, people are becoming more confident about their investments and attracting retail investors.
Thus, it benefits the sub-brokers working for such stock brokers who offer high-end advanced-level trading terminals and applications that the users will like.
This way, the sub-brokers get more clients who offer the best trading platforms.
The prospects of the sub-brokers look brighter due to less stringent rules and regulations of the regulators like SEBI, BSE or NSE, and RBI on investments and trading.
With fewer regulations, investors and traders can invest and trade freely, which is why the sub-brokers business also grows.
Moreover, there are fewer or very simple regulations for sub-brokers to join the market, making the journey easy for them.
Another factor that is a boon for the sub-brokers in the Indian stock market is the demographics.
India has the highest number of young people, and thus, the growth prospect is high; the investment prospect is high as young people earn and invest for the future, while when people grow old, their income pauses or they retire and then they use their investments.
Thus, India is a young nation, so the opportunities here are abundant for sub-brokers.
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Future Trends in Stock Market that will affect Sub Broker Business
Here are major trends that will affect the future of sub brokership in India.
AI and Digitalization
Artificial intelligence and digitalization will be a major part of the stock market’s future and investments; it already is and will take over in the future.
While this can be a boon for the sub-brokers, if they do not update themselves with time, it can be a challenge for them to survive in the new-age stock market and investment arena.
App based Investing / Trading
Already, investment and trading are taking place via trading platforms; there are no more paper trading concepts.
However, with time, it is going to improve, and more advanced technology is going to come, which will make the stock market more dynamic.
Global Stock Investment
While it already has started but is limited to a few stockbrokers. Global stock trading and investment is going to be a part of the future.
It will help sub-brokers gain more clients and business as they can offer more investment options to their clients. It will help in building their portfolios more diversified and robust.
At present, some stockbrokers offer Robo advisory services while others are yet to offer the same.
With time, Robo advisory will be indispensable to stock market investments and trading.
This can also help sub-brokers, especially in helping clients build their portfolios and create investment plans and other services.
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Future of Sub Brokership in India – Conclusion
So, the outlook for sub-brokers business looks positive from here.
The growing economy, young population, increasing rate of financial literacy, and exceptional advancement in technology for trading and investment are the grounds for better prospects for the sub-brokers.