By Ruma Dubey

Ask a new generation yuppie equity analyst about the “pit” or the “ledger book” and he is sure to draw a blank, looking at you as though you have lost your marbles. And worse still, try telling them stories of how you needed to call your broker, place orders for buying or selling shares and how we depended on this one person totally for the ‘best’ price. The Generation Y will shrivel in horror if you recounted how you used to send your shares for transfer and how you actually got physical share certificates as ‘delivery’. And if you wanted to trade on “Budget Day”? The day would be an ordeal to just get through to your broker and place an order.

The broker was an integral part of the household; like a doctor, who would be treated reverentially whenever he came home or to the office to deliver shares or get it transferred or to collect his brokerage. That was done at a time when there was no internet, no online tracking, no demat accounts and no mobiles! Life like that seems impossible now but yet, we all survived!

Yes, gone are the days of shouting in the pit at BSE and even the desperate calls to your brokers. Those were indeed the scary memories of the trading days and it makes one feel blessed to have this ease of trading at the click of a mouse, right from the comfort of your home/office, with no desperate calls and hair-pulling share transfer procedures. Demat has indeed changed life for the better, for me and you but for the brokers, it has become a rigorous task to even survive. And sub-brokers? They seem to have almost disappeared - Kahaan gaye woh log?

The number of brokers registered with SEBI as at 16^th August 2017 stood at 7909, down from 10,128 in FY13 and 10,268 in FY11. And yes, the ilk of sub-brokers does exist – there were 26,707 sub-brokers registered with SEBI as at 16^th Aug 2017 but this number has been coming down consistently; at end of FY13, there were 70,242 sub-brokers. Retail investor participation is better than before but the truth is that HNI and institutions dominate all the trading.

Post 2008, many brokers were finding it difficult to even make ends meet. Various reasons - high overhead costs, increase in compliance and risk management, falling retail participation, below zero brokerage fees. So one hand their brokerages have come down drastically while overhead expenses have shot through the roof thus making the business unviable. High cost of rent, electricity and people cost has also soared.

So what do many of these sub-brokers and brokers do? Well, sub-brokers are opting to become Authorised Person and many are shifting from equity to derivative, which is seeing more volumes. Many are simply leaving the stock markets, with many becoming realty brokers.

Large brokers too are diversifying. After all there should always be a “Plan B” in life and in the markets, given the high level of uncertainty, surely it is essential. Angel Brokers' owner Dinesh Thakkar has started a fitness club, '48 fitness', and though broking will remain his main fray, he plans to build a chain of such clubs across India. Another broker, Ashok Damani has started a chain of hotels - Platinum Hospitality. He is also now a realty developer. Shripal Morakhia of brokerage house, SSKI has a chain of hotels, known as Smaash; he also makes movies! Broker Jayesh Shah now runs a company of ready-mix concrete. The list is endless of many brokers making alternative plans to fall back upon.

These are the signs of changing times. Brokers will always remain, as long as stock markets remain though the way brokers now work and they will work in the future will change.  Yes, their numbers might rise and fall with the market but they are not a species which is going to become extinct in a hurry. More than individual brokers, we will see only a handful of large broking firms remaining and they will only get bigger with time.