Behind the downsizing of brokerage branch networks: a migration from scale to value

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As an important strategic lever for wealth management transformation and a key window connecting investors, the number of securities firm branches has declined overall in the past five years, reflecting the functional repositioning that physical outlets are undergoing.

Interviewed individuals indicated that securities firms are continuously advancing customer service and optimizing branch network layouts. The profit model of securities branches has transitioned from traditional commission income to wealth management; operationally, they have formed a collaborative division of “online expanding breadth, offline deepening depth,” establishing a virtuous cycle where online customer acquisition and offline operations mutually promote each other.

From “scale expansion” to “value deepening,” the transformation of securities firms’ physical outlets reflects the profound changes in China’s securities industry driven by both the digital wave and wealth management demands.

Functional positioning undergoes changes

As branch construction of securities firms overall enters a “quality-first, efficiency-oriented” deep transformation period, the role of physical outlets is being redefined.

Over the past five years, branch contraction has become the dominant trend. Based on 62 securities companies with over 50 branches selected by Securities Times China for observation, from 2020 to now, 18 securities firms have reduced their branch count by over 20. Among them, China Investment Securities reduced the most, decreasing by 101 branches to 225 over five years; Guosheng Securities decreased by 57 branches to 139, nearly “halved” from the 2017 peak of 244 branches; Everbright Securities, Guoxin Securities, and Hualing Securities similarly reduced by over 40 branches each during the same period.

Correspondingly, only 11 securities firms in the sample maintained moderate expansion, while another 16 firms remained basically stable, with branch count changes within 5.

Behind the numerical changes lies the deep transformation of physical outlet functional positioning. Officials from Galaxy Securities indicated that many securities firms are promoting branches to achieve a functional transition from “trading terminals” to “wealth management hubs.” The role of physical outlets is shifting from “business processing” to “value creation,” becoming a strong supplement to online services and a platform for in-depth service delivery.

“We believe it remains necessary to endow offline outlets with greater content and innovative scenarios. In the future, on one hand, offline outlets will carry the role of displaying the company’s brand image; on the other hand, they will gradually transition from function-oriented venues primarily focused on business handling to scene-based spaces that ‘create offline intersections with clients and further build trust,’” said the Galaxy Securities official.

Officials from Zhongtai Securities similarly believe that the “first increase then decrease” change in branches is an inevitable choice as the securities industry transforms from traditional brokerage channels to modern wealth management institutions. As the core focus of wealth management businesses shifts toward asset allocation, professional investment advisory services, and high-net-worth client services, securities firms will gradually concentrate resources in flagship branches and other outlets.

Regarding the new positioning of physical outlets, officials from China International Wealth stated that physical outlets serve as support points and forward-facing extensions of the company’s nationwide network layout, functioning as employee workplace centers, customer communication centers, and client activity centers. They noted that outlets simultaneously serve as the company’s local brand showcase centers and product display centers, capable of intuitively and vividly presenting the company’s diversified product and service systems to clients.

Officials from Kaiyuan Securities described physical outlets as “community wealth life managers” and “financial health service stations” close to clients and touching frontlines, as well as “wealth management transformation terminal carriers,” directly undertaking the functions of client segmentation service and demand feedback.

Online breadth, offline depth

With increasingly mature online trading platforms and accelerating customer migration online, “whether offline services will be replaced” and “how online empowers offline” have become subjects of industry exploration. According to interviews conducted by Securities Times China, “online breadth, offline depth” has become industry consensus.

Officials from China International Wealth stated that the company has built an omnichannel user operations and service system combining online and offline, leveraging diverse online channels to reach potential customers, enhancing user value through lifecycle segmentation operations online, and relying on internet branches to incubate and transfer high-value customers, forming a virtuous cycle where online customer acquisition and operations mutually promote each other. In concentrated operations of long-tail clients, the company uses data-intelligent segmentation operations to enhance user activity and asset conversion, accumulating manageable client groups, providing concentrated services through “air branches,” incubating high-value customers, and directing them to offline locations where wealth advisors provide in-depth one-on-one services, achieving client asset expansion and long-term value growth.

In November last year, Galaxy Securities established Beijing Internet Securities Branch, aiming to reconstruct online customer acquisition and online-offline collaborative models. The company uses investor education content as a lever, continuously delivering output on public platforms to enhance wealth management brand value and influence; opens the closed loop of “online promotion—offline engagement—full-cycle service”; leverages the data-intelligent platform to achieve more refined client profiling and more precise financial service delivery. In the view of relevant officials, offline focuses more on individualized financial service needs of investors and complex business implementation; online focuses on large-scale reach to retail clients and standardized services, building a “convenient online reach, offline within reach” collaborative service ecosystem.

Guohai Securities’ practice focuses on empowering frontlines with digital tools. The company has built a digital operations system centered on “data platform + digital employee operations platform,” leveraging intelligent operating engines to understand client needs and achieve “real-time intelligent triggering of online strategies, real-time alignment of offline strategies.” The core of online empowering offline lies in “tool sinking, capability rising,” integrating intelligent engines into business processes, equipping frontline employees with digital tools, and promoting offline outlets’ transformation from traditional trading counters to more professional and warm “wealth management advisory centers.”

Outlet assessment focus clearly shifts

As outlet functional positioning shifts from “trading channels” to “wealth management service centers,” the assessment serving as the “command baton” also shifts accordingly. Multiple interviewed individuals stated that the industry now focuses more on value-oriented indicators such as asset holding scale, investment advisory service capabilities, and client stickiness.

Galaxy Securities officials told reporters that the company has currently formed three major operating approaches. First, concretizing the requirements of financial “five major articles” into implementable business guidelines, such as strengthening assessment of equity fund and index fund holdings, driving inclusive finance through index investing; strengthening assessment of innovative business such as personal pension account openings and pension financial product sales, guiding branches to enhance asset allocation capabilities in providing pension planning solutions to clients. Second, continuously strengthening assessment of investment advisory services and asset allocation indicators. Third, encouraging branches to pursue differentiated and specialized development paths based on regional resource endowments, guiding branches to extend their strengths and build core competitiveness in niche segments.

Officials from Guohai Securities noted that the company focuses on client development and client operations, highlighting two major orientations of customer service innovation and quality improvement and promoting wealth management transformation, continuously increasing the assessment weight of financial product holdings, and incorporating specialized services such as long-term investment returns, investor education, complaint management, and employee data-intelligent services into assessment scoring.

Officials from Kaiyuan Securities also stated that the company conducts differentiated assessments of each branch based on its own advantages, weakening traditional trading indicators while strengthening value-oriented indicators such as asset allocation and client stickiness.

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