By Motilal Oswal

CMD, Motilal Oswal Financial Services Ltd

Financial

Services

in the next

decade.

The Business
Challenge and
Opportunity
The one thing that is constant is change.
In business its very difficult to keep up with changes.
And the pace at which things have changed is amazing.
Be it products, service or technology, change is the name
of the game. So its upon us to capitalise on the changes
around us. Accept them in the right way,
and there is a definite benefit for you.
I would like to share, the opportunities which you all
could really capitalise on; and some challenges and
problems which we need to address.
First, lets talk about the opportunities.

The Big
Opportunity in Equity
You must've seen India and China; the global powers are shifting from developed markets to
developing markets to India. In China 11% of population invests equities and in Korea it is 10% ;
but at our end, its only slightly higher than 1%. We have only 1 crore DP accounts. These are
likely to go up to 5 crores in the upcoming years. But even then that will be only a small part of
the 120 crore bank accounts we will have in the country by 2020. In the upcoming years there is
a huge amount of new people who would be investing into equities. So my message to you?
Target the equity growth opportunity aggressively.

COUNTRY

INVESTORS POPULATION

China

152

1,325

11%

Korea

4.6

47

10%

India

16

1.190

1%

All figures in million

Knowledge First
Invest in knowledge. It is the most potent and affordable nectar in the world.
Knowledge will always be yours forever. Most of us think that they are satisfied with 500 clients,
which is not good. How many people read magazines or go for some formal training?
Let me tell you, this is a knowledge economy; you have to upgrade very fast.
For a start, read at least two business papers everyday. Read a good book on investment or
management. Learn the basics of fundamental and technical research.

The Intermediation
Opportunity

Learn the art of selling and of relationship management. Be prepared for the questions
that your client will ask in business. You have to generate knowledge within yourself.

If you look at the broking business size; in 2009-10 ` 11700 crores of brokerage was generated. Now, the big

If you dont like reading, then spend time with those people who are smarter and better than you.

picture -10 years down the line, the annual brokerage is estimated to be ` 65000 crores. There is huge growth

Tomorrow the customer may ask you different questions which you havent heard of.

expected in mutual funds distribution commissions and insurance distribution commissions as well. The goal

Knowledge is important. And there is no shortcut.

you set for yourselves in terms of share of this kitty is very critical. Even if you want to target 0.1 percent of the
brokerage kitty, it would be 65 crores! I will not be surprised if the above growth estimates are surpassed.
The equity broking business will be big business!

5x
11,482
3x

6x

55,860

2219
19,502

65,000

11,728
FY10
Equity Broking
` in crores

10

FY20E
Life Insurance
commission

Mutual Fund
distribution

The Market is
10 times bigger than
you think it is
We have been talking about thinking big. And its going to be much
bigger in future. The future will be different from the past.
If you dont think big; you will be redundant. So the first thing
is to stop being pessimistic about growth prospects.
Plan and think big. Keep on thinking about growth as an opportunity.
Are you planning for the next 3-5 years when you invest
in technologies or processes? Right now, our corporate office
is 15000 sq. feet. We are talking about a 250000 sq. feet office
next year. Are you planning big too? With every opportunity comes a
challenge as well.
Now lets outline the challenges and some proactive measures we can take.

Maintaining Strong
Client Relationships
If you think the current market is competitive; you havent seen anything yet. Everyone is looking to
profit from the India growth story. Competition will intensify with new players and consolidation. Your
current customer is also someone elses future prospect. You need to bulletproof your existing
relationships so that business from your current customers grows and thrives. Profile your existing
customers are they Investors or Traders, find out about their financial goals - what is their
investible corpus, what is their risk appetite, what are their returns expectations. Once you have this
vital insight; you will be better equipped to go about fulfilling their needs. The more a customer
believes you understand his needs; the more business he will give you. Organic growth from current
customers is one of the most efficient ways to grow your business.
Do you have an organic growth strategy?

Are you actively

looking for new
clients?
Clients have a life cycle; Old clients become inactive and will have to be
replaced by more new clients.
Brokers/Franchisees who have not acquired new clients are now nowhere.
Sales is a costly affair. Investment into having dedicated sales people
are necessary and may not show immediate results. But you can not
escape this investment if you want to grow big. You need to start understanding
the process of sales. You have to invest into generating new leads for
sales and work on the process to continuously improve the quality of leads
and conversion ratios. References from existing customers are the best way
to acquire new customers but you can not solely rely on this source to achieve
your new clients acquisition goal. You can also acquire a new customer
by selling him PMS, Mutual Funds or insurance. You have to set a goal
for achieving trail revenues from AUM based products. This goal can be a %
(say 30) of your total revenues.
Do you have a client acquisition mindset?

Sales, sales and

cross sales!!
Another big challenge is dynamic change.
Margins will change. And maybe there would be some brokerage war.
But while profitability margins will SHRINK, absolute profits will RISE.
AUM based trail-fee products like PMS and Mutual Funds will grow very
fast and so will insurance product sales. Brokerage revenues are volatile
but having a large corpus in AUM based trail fee products will offer stability
to your revenues. Sales, sales and cross sales!!!! Thats the mantra.
We have to start thinking very seriously about cross selling
of products which your customers need. They are buying those products
from others. Lets try and match our FIXED EXPENSES with FIXED INCOME.
And the last is the size, unless you have got size, you cannot invest money
on the brand, and technology.
So you have no option except to become big!

From Broker
to Financial Planner

Maintaining Strong
Client Relationships
If you think the current market is competitive; you havent seen anything yet. Everyone is looking to
profit from the India growth story. Competition will intensify with new players and consolidation. Your
current customer is also someone elses future prospect. You need to bulletproof your existing
relationships so that business from your current customers grows and thrives. Profile your existing
customers are they Investors or Traders, find out about their financial goals - what is their

Brokerage stand-alone is not going to add more value. So more important is value addition.

investible corpus, what is their risk appetite, what are their returns expectations. Once you have this

So please, upgrade your skills, dont think of yourself as a broker or a discounted broker.

vital insight; you will be better equipped to go about fulfilling their needs. The more a customer

5 years down the line, there would be 50 lakh crores of savings every year. Right now its

believes you understand his needs; the more business he will give you. Organic growth from current

20 lakh crores. Most of it goes into fixed income and small savings. What share of this wallet do we want to get?

customers is one of the most efficient ways to grow your business.

Do you have an organic growth strategy?

We have to position ourselves as a One Stop Financial Service Destination and focus on a greater
Wallet share. Standalone brokers may become defunct in the next decade. Some of us
have already passed, the CFP qualification. It is imperative that all of us do so. Not just to get
broking revenue but also to attract greater wallet share.
Not just to survive; but to thrive.

Have you invested in

people?
How much can you do by yourself? You have to invest in employees. There is a major difficulty
in retaining and attracting new people. We have taken a project internally on helping our business
associates in this important area. How many people you have? Have you clearly defined
KRAs (expected results and behaviour) for each employee? Have you defined an incentive plan
for your revenue generating employees? How much do you know about your employees?
Only money is not really going to retain them. Groom or hire somebody who can handle the daily
operational matters. Empower this person and handhold him for developing confidence.
You need to have this critical resource with you and decide that you are not going to spend more
than 15% of your time on operational matters but still would have a complete grip on the operations.
Key is to have a good resource who is empowered and you set up a process of reviewing the work
through clear dashboards and review mechanisms.You need to spend more and more time on sales,
cross sales, meeting top clients and expansion. You need support from your employees too.
So make them your partners. Give them incentives and bonus.

Knowledge First
Invest in knowledge. It is the most potent and affordable nectar in the world.
Knowledge will always be yours forever. Most of us think that they are satisfied with 500 clients,
which is not good. How many people read magazines or go for some formal training?
Let me tell you, this is a knowledge economy; you have to upgrade very fast.
For a start, read at least two business papers everyday. Read a good book on investment or
management. Learn the basics of fundamental and technical research.
Learn the art of selling and of relationship management. Be prepared for the questions
that your client will ask in business. You have to generate knowledge within yourself.
If you dont like reading, then spend time with those people who are smarter and better than you.
Tomorrow the customer may ask you different questions which you havent heard of.
Knowledge is important. And there is no shortcut.

10

Technology and
Processes
We have seen drastic changes in the way we do business due to the use
of technology. Technology is the key driver for our business
and we need to learn about it and invest into it for survival as
well as growth. If you want to achieve scale, it can not be done without
establishing and following the good processes.
Process and technology are the foundations on which strong businesses are built.

Compliance and
Risk Management
It is going to become more stringent in the future. Please accept the fact
that compliance and risk management are very important. Believe me, it is good for business.
It is necessary to be pro-active in this rather than betting your future in not doing this.
There cant be any gains without any pains.

Review Progress
Set GOALS for the next 5 years. But change knocks the wind out of all good plans.
Unless performance is reviewed regularly, growth becomes stunted. Your business
plan depends upon monitoring progress- whether its achieved or over-achieved.
er-achieved. You
have to understand what is working for you or not. Unless you know that, you cant
move forward. UpperMOSt, our Business Development portal, is an important tool
for monitoring your progress vis-a-vis your business plan. The Business
ess Development
Reports (BDR) in UpperMOSt are an invaluable tool that help track business
usiness activity in
detail and help channelise your efforts better.
We get what we inspect, not just what we expect.

11

Theres a big difference

between seeing an
opportunity and seizing
an opportunity
Pat Guritz
These were the few challenges, which were important. I just want to say that this business
is going to be very big and a lot tougher too. We have to take care of our customers,
people and partners. The world is very competitive. The opportunity is huge;
but its not for everybody. The challenges are far-far bigger than opportunities.
But at the end of the day, you have to make the effort. Its like, unless you die,
you are not going to go to heaven! We promise our support. It is up to you to act.
We invite you to participate in the journey, and profit from it.

Thank you!

12

108 benefits of

being a Motilal Oswal

Sub Broker

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Multiple Business Partner* Models for

different needs
One of India's largest networks with reach in
over 591 cities
Centralised Specialist Advisory Desk
Centralised Client Reactivation Desk
Dedicated Business Development Managers
Quick Account Opening with pre defined TATs
Research coverage of more than 240
companies
Unique Business Development & Loyalty
Program - Uppermost
Pan India CMS tie-up
Access to Expert Speakers for Seminars
Promoters of MOFSL well recognised and
awarded by the industry
Multiple Financial Products like Equities &
#
Derivatives, Commodities , PMS, Depository
Services, Distribution of Mutual Funds,
Insurance, IPOs under one roof
Received 'Best Franchisor Award' in Financial
Services Category for two years in a row-2007
and 2008
MOSL ranked as No.1 broker in the ET-NOW
Starmine Analyst Awards 2009
Support for Arbitration & Legal Matters
Annual Conference & Business Partner*
Awards
Well Capitalised Balance Sheet
Online Risk and Surveillance Software
Systematic Transition & Client Migration
Process
Direct access to Senior Management
Dedicated Local Dealer
Money Management solutions for clients
Customer Profiling Tools
Interaction with Research Desk
Subscription to special Research literature like
Most Wealth, India Strategy Review etc
Daily Pan-India conference call with Market
Analysts
Advice based Online Trading Platform
Real time disseminations of Research and
Technical Advice
Dedicated Risk Management Desk
Dedicated Customer Service Desk
Quick Query Resolution
Capability to handle range of customers Retail to Super HNI
Online Fund Transfer
Pan India Funds Payout within 24 hours

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DP Slip Punching facility at the sub-broker's

end
Unique Workflow Monitoring Software
Trading Software for Technical Analysis
Online Portfolio Tracker
Mini Admin Terminal
Remote Access to Back- office Software
Access to DP Software
Access to Wealth Manager - the one window
view to your client's networth
Single Window login to all Back-office systems
Combined Money Pay-out in a single window
for all segments
Online Pay-out for offline clients
Any time Pay- out punch- in
99.9 % uptime of Orion Trading terminal
State- of- the- art Data Center
Low dependency on Internet for all
operations related software
Tie-up with VSAT vendors for preferred rates
Dedicated IT Helpdesk
Facility to map Multiple Bank Accounts in
Back office
Tools for tracking Employee Productivity
Regular Sales Contests
Business Development Analysis & Reports
Customised Business Presentations
Business Plan Preparation
Revenue Trackers
Lead Management Tools
Sales Force Automation Tool
Marketing Support through National
Campaigns
Local Area Marketing & PR Support
Well defined and Standardised Branding
Process
Unique Look & Feel defined for all outlets
Intense Dealer Training modules
Advanced Trading Terminal
Regular Training Programs and Workshops
Dedicated Operations Training
Training & Certifications
One Click Access to Procedures and Circulars
SMS Confirmation on daily basis
Online IPO & Mutual Funds
Business Audit Process
Unique Business Process Excellence Team to
suggest, implement and monitor quality
processes
Well defined escalation matrix
Strong & Practical Risk Management Practices

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108.

Confirmation of Trades on Online basis

Access to wide range of financial services like
Investment Banking & Private Equity
SMS Software to send Bulk SMS
Well Respected Brand
Knowledge Sharing Platforms
Entry to Chairmans Club for top achievers
Customised Stationery
Annual Complete Health Check up**
Life Insurance Cover**
General Insurance Cover**
UpperMOSt BUZZar - a special magazine for
our sub-brokers
Socially Responsible Corporate Citizen
Welcome Kit to clients
Human Resource Development Support
Good Infrastructure Support
Rated no. 1 in research in Starcom Mediavest
Survey of online users - 2007
Winner of CNBC-IT User Award 2008 in the
financial institutions category
Rated as the Top broking house in terms of
trading terminals as per Dun & Bradstreet
Survey in 2008
Ranked the Best Country Research - Local
Brokerage in Asiamoney Brokers Poll - 2007
Largest Dealing Room in India (opened on
11/03/08) endorsed by Limca Book of Records
in 2009
Holding Company is a Publicly owned
company listed in both BSE & NSE
10% of paid-up capital of holding company
held by PE funds
Awarded by BSE as 'Major Volume Driver'
consecutively for the past four years
Cutting edge technology
Special Telephone Tariffs : Closed User Group
Landline and Mobile
Courier Tracking Software
Highly Ethical & Transparent business
practices
Business managed by Highly Respected
Capital Market Professionals
ISO 9001: 2008 Certified Company
Access to unique Annual Wealth Creation
Study done by Mr. Raamdeo Agrawal
National Advisory Council for sharing best
business practices and business development
ideas
MOSL has highest credit rating for 4.0 Billion
Short term debt Programme

Some of the features mentioned herein could be available only to Business Partners* who meet certain pre-qualifications. MOSL reserves the right to change the benefits from time to time.
*Business Partner/ Business Associate/Franchisee means Sub-broker. **Available to top Sub brokers. #Through Motilal Oswal Commodities Broking Pvt. Ltd. Data as on 30th September 2010.

300 Clients to 19,000 Clients

18 Offices to 183 Offices

Suresh Loya - Director / Branch Manager - Prachi Investments Pvt. Ltd., Nasik

Krishna Narnolia - CMD - Narnolia Securities Ltd., Ranchi

Revenue growth by 35 times

Clients increased by 148%

Bhawarlal Agarwalla - Partner - Agarwalla Capitals, Guwahati

Satish Mehta - Partner - Fortune Securities, Mumbai

Terminals increased fivefold

Grown 10 times in 5 years

Manoj Desai - Proprietor - Mihir Investment (Sit-in Remiser), Mumbai

Madan Mohan Lohiya - Dominating Partner - Investcare Securities, Jodhpur

Modest beginning with 55 Clients to 6000+ Clients

18 clients to over 4000 clients in 5 years

Vijay Patel - Partner and Business Head, MAS Consultancy, Mehsana

Kavish Shah- Proprietor, KRS Investments, Kolkata

Think Big!
For more information: Call:022 30896680 I SMS: MOSL Info to 575753 I Email:info@motilaloswal.com I Visit us at: www.motilaloswal.com
Motilal Oswal Securities Ltd. Member of NSE and BSE
Registered Office: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai 400 064
NSE (Cash): INB231041238, NSE (F&O): INF231041238, BSE (Cash:) INB011041257, BSE (F&O): INF011041257, PMS: INP000000670, CDSL: IN-DP-CDSL-09-99, NSDL: IN-DP-NSDL-152-2000, AMFI:-ARN-17397 Motilal Oswal Commodities Broker Pvt. Ltd. MCX
29500, NCDEX CMID MS0114. FMC Unique Membership Code: MCX: MCX/TCM/CORP/0725 & NCDEX:NCDEX/TCM/CORP/0033
Sub-brokers affiliated to Motilal Oswal Securities Ltd-Prachi Investments BSE: INS010816531/01-10412 Date of registration: 17-Nov-00 NSE: INS232889738/23-10412 Date of registration: 28-Feb-06. Registered office: 101 Sarda Sankul M. G. Road Nashik-422001
4HOHYHZO[YHNarnolia Securities (PT1200):-BSE: INS011444630/01-10412. Date of registration: 15-Nov-01 NSE: INS231462131/23-10412 Date of registration: 24-Jan-03. Registered office: 9th, India Exchange Plaza, Room No6/7A, Kolkata-700001 West Bengal.
Agarwalla Capitals):,!05:+H[LVMYLNPZ[YH[PVU! 6J[5:,!05: +H[LVMYLNPZ[YH[PVU!:LW9LNPZ[LYLKVMMPJL!Z[-SVVY/HYPIHS9V`4HYRL[(;9VHK.\^HOH[PFortune Securities BSE: INS012518325/01+H[LVMYLNPZ[YH[PVU!1HU5:,!05:+H[LVMYLNPZ[YH[PVU!1HU9LNPZ[LYLKVMMPJL!7HY]H[P*VVW/ZN:VJ3[K.H\ZOHSH3HUL6WW9HTSLLSH4HPKHU4HSHK,4\TIHP Mihir Investments BSE INS011909418/01-10412
+H[LVMYLNPZ[YH[PVU!(WY5:,!05: +H[LVMYLNPZ[YH[PVU!4HY9LNPZ[LYLKVMMPJL!+H[[HUP;YHKL*LU[LYZ[-SVVY*OHUKH]HYRHY9K)VYP]HSP>4\TIHP Investcare Securities BSE INS011378226/01-10412 Date of
YLNPZ[YH[PVU!(\N5:,!05: +H[LVMYLNPZ[YH[PVU!5V]9LNPZ[LYLKVMMPJL!.VSL)SKN9VHK1HSVYP.H[L1VKOW\YMAS Consultancy BSE: INS013580829/01-10412 Date of registration: 10-Apr-07 NSE: INS233737027/23-10412 Date
VMYLNPZ[YH[PVU!4H`9LNPZ[LYLKVMMPJL! <S(WVSV,UJHS]L6WW:PTHUKOHY;LTWSLOPNO^H`4VKOLYH9VHK4LOZHUH.\QHYH[KRS Investments BSE: INS012778218/01-10412 Date of registration: 31-Jan-06 NSE: INS232323019/23-10412 Date of
registration: 17-Nov-05. Registered office:3A, Pollock Street, 3rd Floor, Kolkata- 700001