It's the discount broker's first-ever ad campaign but should these online brokers roll out an AMFI like 'Mutual Funds Sahi Hai' investor awareness campaign first?
“Shreyas, don’t put your hard-earned money in these stocks and shares. It’s all fixed. It’s gambling. You will lose all your money… Sab jhol hai bhai… It’s too hard, not for everyone… Invest your money in fixed deposits (FDs), or Post Office Savings Account, it’s safer…,” somebody once told me.
This somebody is present in everybody’s life. It could be your mother, father, sister, brother, uncle, friend, teacher, partner… Regardless of who somebody is, hesitancy or fear of the equity market is ubiquitous.
2020 may have lessened some bits of this fear. The COVID-induced national lockdowns last year have made people realise the value of savings and investments. One can never be over-prepared for a rainy day and, let’s face it, it’s been pouring since March of last year.
Upstox, a leading discount broker, revealed in April this year that it had witnessed a 15x growth in its total customer base in 2020 versus 2018. Also, it’s adding nearly two lakh new accounts in a month.
Discount brokers offer you a platform to invest in, and charge a flat fee for your trades. They compete with full-service brokers who, apart from letting you trade in various markets, offer other services, such as tax planning, retirement planning, etc.
It was also in April that the Mumbai-based discount brokerage released its first-ever campaign during the Indian Premier League (IPL) after signing up as an official partner with the T20 league a month earlier, in March. Apart from Upstox, we’ve also seen ads from Groww in recent times.
Called ‘Start Karke Dekho’, the campaign aims to promote better financial participation in the equity market through a series of ads. The ads show people that, while some tasks such as touching your toes, etc., may be hard, investing through Upstox is nothing, but a cakewalk.
The Hindu Business Line said back in October that as per industry estimates, the market share of the top five discount brokers in the overall equity and commodity markets broking commission pool is now about 18-20 per cent.
Upstox competes with the likes of Zerodha, Angel Broking, Samco Securities, Groww, 5Paisa, etc.
While it’s heartening to see a campaign from a leading discount broker, one is still worried about ‘somebody’, and how it’s keeping so many potential traders and investors from making the first move.
We wonder if the discount brokers, who’re slowly gaining a large pie of the equity market, should dole out a mass awareness campaign, a la ‘Mutual Funds Sahi Hai’ from the Association of Mutual Funds India (AMFI). That campaign aimed to spread awareness about the MF category and dispel myths surrounding it.
“Discount broking is more complex than mutual funds,” remarks Mahesh Murthy, a venture capitalist and head of Pinstorm, a digital marketing firm.
He went on to say that people’s hesitation about investing in the stock market is not because it’s difficult, but because they “don’t know which stock to invest in.”
“My guess is that it (Upstox) will end up with a large number of downloaders and not enough transactions happening through the system,” says Murthy, adding that discount brokers won’t tell you which stocks to buy or sell.
Murthy referenced Robinhood, an American stock trading and investing app that has a gigantic community of users advising on what to buy and sell. He likened Robinhood to Zerodha (in India), and remarked this is something Upstox needs to work on.
Upendra Namburi, co-founder, Rippl.club (former chief innovation officer and marketing officer, Bharti AXA General Insurance), tells us that if an industry forum does an AMFI-like campaign for equities, there’s always a benefit. It brings in authenticity and there is a better trust factor. “It rubs off on all the players in the category.”
He went on to say that in any market, whether it is soap or equity, you need to be educated. The second thing is simplicity. It is very important in any category, which is why UI and UX come in very handy.
There needs to be communication. “You need to have a sense of responsibility. The industry forum can communicate about the upsides and the downsides, and what it means to be a responsible trader,” remarks Namburi.
For Naila Patel, Mirum India’s executive creative director, the first campaign (from Upstox) should not have been about “everybody jump in and trade, but about what to know before you jump in.” Instead of doing a ‘Stocks Sahi Hai’ campaign, there should be a ‘Kya Jaanana Zaroori Hai’ campaign.
She says that after having worked on multiple MF accounts, Mirum India’s research revealed that people invested their money in the stock market and burnt their fingers. They realised that they did not know how to go about it, and so they moved to MFs that are safe. These people did not start with MFs. “Usually the young people, who don’t have anything to lose, enter the equity market.”
Patel adds that Indians are not conversant about money, and school/college kids are not taught about the basics of money, or how to handle it. “So, it is unfair to expect 25-26 year olds, who’re dependent on their parents, to make money choices or their own financial decisions.”
“SEBI says that MF companies have to spend a certain amount on education. There’s no similar mandate for listed companies. If that happens, then we will see some initiatives towards educating people,” she signs off.