SINGAPORE (Mar 18): During a recent trip to Kuala Lumpur, I ran into an old friend whom I knew from my days in the brokerage business back in the 1990s. To my surprise, he told me that he still worked in the industry and appeared to be making a good living at it. After two financial crises and a collapse in brokerage commissions, just about everyone I know from this business has moved on. Many found new careers in banking or fund management, some found themselves doing consulting or corporate work and a few drifted into a life of semi-retirement.

So, how did my old friend survive in what many people say is a tough business? According to a fund manager who has known him for decades, he simply stuck to doing what brokers have traditionally done: bringing promising companies to investors. In particular, my old friend had alerted the fund manager a few years ago to a company called Pentamaster Corp, which makes automated test equipment. He organised meetings for the fund manager with the company; and, when the fund manager was ready to invest, quickly found a block of shares for him. Pentamaster’s revenue and earnings have quadrupled over the last three years, and its shares are up more the 30 times since the beginning of 2015.

The same week that I was in KL, news broke in Singapore that DBS Group Holdings will transfer its retail equity trading business from DBS Vickers Securities to the bank. Predictably, it reignited old grouses about the lack of retail investor interest in the local market and raised concerns that the move might result in some of the brokerage firm’s remisiers losing their clients or even their jobs. Nobody seemed interested in asking whether the local brokerage firms and their remisiers have been serving their retail equities clients well, or if DBS Bank will ultimately do it better.

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