The Analysis Of The Brokerage Business Transformation Of Wanlian Securities

Broking business has been important income sources of brokers in China. However, the whole industry of brokers’broking businesses has declined since2008, mainly because brokers provide homogenous and channel-style service for investors. Brokers mostly provide trade channels for customers and collect commissions from customers as their main income sources. In this way, brokers’ fate is closely related to market fluctuations, so that the awkward situation of depending on heaven for food. Under the general background of floating commission, such competition among brokers is certain to be translated as low-level commission discount competition. As a result, brokers acquire competition advantages by scarifying their own profits through price competition. Commission level relates to market height, so profit falling is an inevitable result of low-level competition.In recent years, with acceleration of opening to the outside world of the broking industry, continuous creation of products and services, and change of customers’investment philosophy and transaction behaviors, most brokers have realized that it is necessary to transform broking businesses, and they have started doing some beneficial explorations. However, we can say that brokers, except Merrill Lynch and Edward Jones, have not formed models through which they can make profits under different economic environments at present. In the thesis, the author tried to explore possible transformation ways and methods for brokers in China with the use of the method of comparative study, and through combining current situations of broking businesses of brokers in China and comparing and researching years of experiences (especially experiences after free commission) of broking businesses in North America. The author proposed that brokers shall walk out of the dependence on incomes form single-channel commissions, translate their broking businesses to consulting services and financial services gradually, and enhance the proportion of non-trade channel income, such as service charges, to business incomes gradually. In the thesis, the author analyzed current situations and existing problems of broking businesses, mainly explored the method of improving brokers’broking business level on the plane of Stock Exchange. At the same time, brokers should regard directly facing and understanding customers on Stock Exchange as advantages through combining consulting services and marketing. Brokers shall be customer-focused, rather than focusing on trading channels and low-level consulting services. Brokers shall regard "growing with customers jointly" as their own long-range objectives and plans, and avoid business models of seeking temporary relief regardless of the consequences and draining the pond to get all the fish. And at the same time, in the day with ceaselessly increasing innovative pace of securities, broker headquarters shall complete strategic positioning of their own business mode and profit model to adapt to new situations. They can fashion themselves into discount-type brokers-giving priority to light business departments, or comprehensive brokers mainly providing comprehensive financial services-giving priority to providing value-added services for middle and high-end customers. Companies with characteristics and adapting to investors’demands can gain "rebirth" through transformation.