For a given period, which are the stocks that matter to the customers of a broking firm and which are stocks that matter to a retail broker? Are they the same stocks or are they different?
One might say that the stocks that matter to a retail broker are the stocks that bring in the most volume of trade. Those are the stocks that bring in the majority of their revenue. If you think of it, these stocks are owned by the customers of the broking house, so these are part the stocks that matter to the customers.
The fact is that these are not the only stocks the customers are interested in. Customers are interested in all the stocks they have built up positions in. The higher the value of the positions, greater are the stakes of the customer on that stock. Apart from that, customers are also interested in the stocks that they are actively tracking, in other words, the stocks on their watch list. The watch list stock is not that important as the stocks on which the investors have taken a position but still, they are important as they are the opportunities that investors waiting for.
If you are a retail broker who wants to provide better service to your customer, the knowledge of the stocks that matter to your customers is very important. You can think of the aggregate position of your customers as a portfolio of your firm. If that portfolio is going to do badly then you can be sure that your business is going to do badly too. The aggregate watch list can be viewed as the direction in which the investment of "the firm"is going. So it pays to be on top of this and help make amends as needed.
Now let us see what you can do if you are armed with this information.
Research desk optimization
If you know the stocks that your customer have high stakes in, it will allow your research desk to track those stocks and make sure they are investment grade. This is especially true for the stocks that have high built up positions. The research team can make sure that the stocks that they cover are the ones that the customers are interested in. There might be stocks that are popular with the customers but are not yet researched by your research team. Knowing the stocks that are relevant to your customers will allow you to bring those uncovered stock under the preview of research.
Provide guidance that makes a difference
Knowing the stocks and the sectors that matter to you customer enables you to keep a lookout for news and developments that might positively or negatively impact those stocks. It allows the firm to cast a tighter net to catch the relevant information instead of having to gaze at the plethora of news and information that gets thrown at you nowadays. Fewer but more relevant leads can then be analyzed by experts within the broking firm to discern the real implication and give issue guidance accordingly.
Improve Customer Loyalty
A research report or a investment guidance is most valued by the customers when it is relevant to them. They will be more interested in reading the report if it is about something they own now or something they want to own in the future. Even people who are not actively investing would tempt to go through a report of a stock that they have in their kitty. It will be as if they are getting personal attention which everyone loves to have.
All this can be achieved if the broking firm is willing to put in the time and effort needed to track the positions of individual customers on daily basis, get the aggregated view of those positions and then factor all that information to your research team on a daily basis. You might say it is a lot of work and I agree with you. It is a lot of work unless you are one of our customers.
Finahub Kinship Platform's Active Security Report allows the broking firm to track the securities that matter to their customers. It provides the firm level aggregate position and the security level drill drown, give the firm to see the whole picture and at the same time enabling it to drill down into the details.
This is just one of the many features of the Kinship Platform that is designed to help broking firms to server their customers better.
Finahub Team