Is it time for stocks without brokers?

The word is disintermediation. With the proliferation of lavishly funded e-commerce enterprises, this is happening in every sphere of activity. The grocer, the mobile store guy, the taxi company, the banker, the real estate broker and the mutual fund distributor are some of the people who were earlier indispensable to our lives and are now going out of business. Technology-driven platforms and applications (‘apps’) are replacing these intermediaries, creating a win-win proposition for both manufacturers and consumers.

Yet, in one area which took to technology earlier than others, nobody talks of direct access to consumers. People in the big cities have learnt to buy books, mobiles, shoes and even something as personal as lingerie online. Why do they need a broker to buy stocks which were dematerialised long ago and can be delivered directly into your account?

The Securities and Exchange Board of India (Sebi) implemented direct plans for mutual funds since January 1, 2013. By June that year, these plans came to account for nearly a quarter of the sector’s assets under management. While the initial push came from debt funds, recent reports suggest around half of the fresh inflows from retail investors in equity funds are through direct plans. This shows that investors, even smaller ones, are gaining confidence about choosing and making their investments online.

Even the insurance sector, with a more powerful intermediaries lobby, has seen the advent of online products that allow you to buy insurance and unit-linked investment plans directly.

Now, for someone, who can understand an insurance policy with its numerous terms and conditions and buy it online, buying a stock without the help of a broker should not be a difficult proposition. Why are Sebi or the exchanges not even thinking aloud about it?

After all, what great help is a broker to a small investor? Common sense demands that the broker deploys his best resources to some of the larger clients. So, you are going to get some a fresh-from-college relationship manager who might only be parroting what he heard on TV this morning to push the stock his boss wanted him to.

In addition, you are showing your cards to a potential competitor in the market. Most broking firms have a proprietary book where it uses its own money to buy and sell stocks. Nothing stops your broker from playing against you, despite the obvious conflict of interest. What is worse is you are paying him to fleece you.

This column would not be enough if one begins quoting anecdotes of retirees and widows falling prey to wrong broking advice and seeing their life’s savings vanish in thin air to margin calls. Brokers often use the client agreements to absolve themselves of any responsibility in such cases. As in the recent scams, after playing along, they don’t think twice about being turncoat and play the victim.

No wonder big successful investors on the Street like Rakesh Jhunjhunwala have their own broker licence. Large corporate treasuries also often execute through their own broking firms. Beside the considerable savings on transaction costs, these big guys are also able to play their cards close to their chests, an underplayed but critical factor to investment success.

Online trading has been available in the market for years. But, there is still a broker who sits in between, providing the platform and charging a fee. It is not the objective of this piece to advocate the end of stock broking but, if an investor wants to do without it, he should have an opportunity and an avenue to do so.

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Orange Is the New Black Season 3 Is the Best Yet

Warning: mild spoilers below for season three of Orange Is the New Black.

Shows have a tendency to start sucking around the third season. That was sure true for The Killing and overwhelmingly true for House of Cards. Maybe it’s just that shows exhaust their premises, or that the writers get bored. Orange Is the New Black—one of Netflix’s first forays into original programming, and still the defining example of the genre—has escaped this curse. Season three is the best yet. It’s probably the best season of television that Jenji Kohan, the showrunner for Weeds before Orange Is the New Black, has ever produced. It’s the ideal of her style of television: white people problems seen from below.

If Law Order was television ripped from the front pages of the New York Post, then Orange Is the New Black (whose third season debuts June 12 on Netflix) is ripped from the op-ed pages of The New York Times. Subjects up for discussion include the trendiness of red velvet cake, the novels of Jonathan Franzen, and whether lingerie is empowering. Piper, of course, is the ultimate cliche of the rich white girl: She is in prison because of a lesbian college fling, and her sentence interrupts her plans for the development of a soap line. The whole of Orange Is the New Black is itself a kind of op-ed piece—a very long, very detailed op-ed on the subject of the disgraceful state of the American prison system.

The third season applies this technique of idea television more broadly than previous seasons. In the opening episode, Mother’s Day is underway, and the kaleidoscopic range of characters provides a variety of different perspectives on the reality of being a mother. It reminded me, automatically, of Meghan Daum’s new book, Selfish, Shallow, and Self-Absorbed, and the debates that have swirled around it. How are people judged for being mothers? How are people judged by their choice not to be mothers? What about people who claim they don’t want to be mothers in their twenties but then change their minds in the their thirties? Is motherhood compatible with being a working person? And so on.

What Kohan does is take that debate, which is conducted mostly within the confines of the upper middle class, and transfer it to the world of the racially diverse underclass. And the result is fascinating, because the questions are so different. For the poor, motherhood is often not a choice they think through; it is a fate, which is both glorious and soul-destroying. Life, for them, is not a series of decisions, but of events and moments which come at them. For the people who write op-eds, the privileged ones, choice is the defining feature of our moment. In “the real world” that these writers attempt to think through, choice is ephemeral at best. That episode provides an entirely different perspective on the debate that raged over motherhood after Daum’s book: For most women, having a baby isn’t a lifestyle question. It’s something more and less.

COPS used to be one of the few major American TV shows in which you could see poor people. But Orange Is the New Black has found a more humane approach than looking for methheads and waiting for the police to lock them up. The show is about being forced to bridge the gulf that more or less nobody wants to cross anymore—the gulf between the privileged and the underclass. At one point, when the women of Lichfield prison are looking at a lingerie catalogue, they wonder what one of the models’ lives must be like. “She eats pills and ice cream and cries in bed and she cuts herself but on her scalp so nobody sees,” one of the inmates says. “So her life is still better than ours?” Piper asks. The question is rhetorical. Of course it is.

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