On my way into the supermarket to fetch a cheese and ham roll for lunch I encountered a cheerful sunburned fellow in complicated boots, green epaulettes and snug khaki shorts. He was soliciting support for the cause of wildlife conservation. This got me thinking about the appropriate uniform for the time when I will have to take up station at the door of Pick ‘n Pay, shaking the slotted tin for donations to save an equally endangered species – the South African Stockbroker. In ten years we have gone from being a large number of qualified and experienced professionals, mostly respected, who owned both their own firms and also the Exchange itself, to being an almost invisible and unrecognised coterie of greying grumblers generally griping about the way things have turned out.
Unlike the riverine rabbit or the blue swallow, I know that few will lament the drying up of this particular gene pool. Public perception of the stockbroker was usually dominated by stories of spectacular fraudsters and pricey automobiles. However, in this age of international investment banks, CDOs cubed (don’t ask!), hedge funds and the rest of the sophisticated and modern money business, I am always coming across bewildered investors anxious for the service that a professional stockbroker used to provide. That service would include a brief economic scene setting, basic tax information, reasonable and appropriate portfolio advice and very importantly, knowledge of the paths through the jungles of administration and record keeping.
Now I know that I am being nostalgic and romantic to think that the modern investing environment has any place for the amateur investor. Despite its claims to the contrary, the JSE Securities Exchange is neither accessible nor affordable for the man with even as much as R100 000 to invest. I think that this is unfortunate and sad; especially when the suggested home for these funds – the unit trust – has in my opinion, a very poor record. The irony is that there are now more unit trusts than listed shares, so the investment decision for the “small” investor is in fact made harder.
I of course acknowledge that the current stock exchange system is much safer and perhaps a bit fairer and more efficient than what we had ten years ago. Many investors, particularly the computer-literate ones, are delighted with the ease of on-line trading and the access to information, two jealously guarded privileges of the old broking firms, now made public. However, it has been the nature of this technological revolution that the expected cost reductions did not materialise. Some of the extra costs arise from regulatory and administrative burdens imposed by the bureaucrats who realise that with the genie now out of the bottle, the task of policeman just got much larger!
But, back to the problem of the uniform. Dark suit, black shoes, white double cuff shirt, ostentatious cufflinks, old boys tie? Sounds OK, but the problem is that ever since I came to work with these old fashioned stockbrokers at Watermark I haven’t really needed a suit. I find my friends and clients are more interested in my time and ideas than in my clothes.
Have a great weekend
James Greener
18th February 2005
