Mar 21, 2016

What Journalism Has In Common With Stockbroking

I'll dispense with the preamble. What journalism has in common with stockbroking is this:

An old model which was well established and profitable is transitioning with a lot of pain to a new model, which everyone is still trying to figure out.  

The old model was comfortable and cushy (for those at the top). The new model is a major change, culturally, psychologically and commercially, and it is not yet - but one day will be - profitable.

Sira Anamwong/


Another month in Australia, another horrible rupture for Fairfax. If I was a journalist I would probably write "the embattled Fairfax". After already pruning itself back in 2012 and again in 2013, this week the company announced it will cut the equivalent of 120 full-time jobs from its newsrooms.

That's a lot of journalists. It's hard to imagine the company even has that many jobs left to spare. (And according to staff, they don't).

And I really feel for Fairfax. Not only because I love The Age and am a subscriber who reads it every day, but because I think in very difficult circumstances they have been forging an evolution towards an online model quite well.  

New media is great. But blogs and tweets and news fragments do not fill the gap left by traditional newspapers. New media still needs journalists to write the stories, and "citizen journalists" just aren't as good.

Of course, we will get used to it. Just as we have got used to the passing of great puns in headlines (largely gone in favour of SEO), and elementary grammatical and syntax errors in broadsheet news (now that sub-editing, like everything else, is outsourced to cheap workers overseas). We got used to those things, and the world didn't collapse.

So, there is no choice - citizen journalists it shall be, and the real journalists will find work somewhere, somehow, in this new cacophony. Not all the ones being let go now, unfortunately, but future ones will.

Somehow I don't think either the paid subscription model used by most newspapers and journals online now, or the Buzzfeed model, will be the lasting profitable solution.

I wonder what it will be?


Stockbroking has always been a world of boom and bust, but ever since the 2008 crash and the Great Recession that followed (or still follows), it's been all bust. The stockbroking model as it was before then has truly broken and is never coming back. That's probably even a good thing.

Since 2008, it's been impossible to squeeze money out of traditional stockbroking. The margins are too thin; no one wants to pay for brokerage and research when they can get what they need online.

In Australia the ASX has piled more and more compliance obligations on brokers, and ever-higher liquid capital requirements to guard against insolvency collapses. In classic Law of Unintended Consequences style, the result has been an explosion of "shadow brokers" - small and nimble dealing and advisory businesses that range from serious, ethical companies with management and due process, to guys operating out of their loungerooms with, let's just say, less than that.

In the last decade that I worked in broking operations, I watched these companies come and go, the same people moving from license to license and company to company in a never-ending scramble to find some way to make money. Most of these people are straight up, love broking and just want to make money for their clients and themselves - but the landscape is unforgiving.

So now everyone knows the future is "online". The future is "robo-advice" (less risk of non-compliant customer management or advice), and "fintech".

But what is the best kind of company to run? What's the best service to offer: advice to customers, or services to dealers? How do you innovate and create a solution, and not be copied by a thousand imitators with the same access to the cloud that you have?

Time will tell.

I'd love to step 5 years into the future and see what's happening in both journalism and financial services. My guess is both will be profitable, but not exactly in ways people are building them now. The future will come up with something else.

Disclaimer: I work in FinTech and love it.   :)


  1. I believe you are spot on. Traditional journalism is on the outs, I can;t complain, I haven't bought a paper in years so I am part of the blame. You are probably right on stock-brokering too, for now I like the old model and my broker.

    1. If you have a good broker then the old model is great!
      I read the paper online too. I got print copies delivered for years and still prefer reading a newspaper in print, but I leave for work too early to get my print copy delivered on time,and the online subscription makes more sense, so...

  2. Sigh. I do like newspapers. On-line responds to the quick fix needs, but I sometimes need a more indepth article. And my dinosaur self likes the feel of paper.
    I will adapt. I hope.

    1. One thing that paper does better than online is relaxed browsing - it also allows you to find and read more articles than you tend to when reading online. Online we tend to read the lead articles and the clickbait. But yes, we get used to it and we move on. I think I get the rest from Twitter links and radio.

  3. I actually love your analogy and I think that you are right. I do miss the old days of opening the paper every morning rather than a web browser :)

    1. Thank you! Yeah I miss those days too. I also used to love doing the crossword and sudoku and those aren't the same on a screen. :)



Related Posts Plugin for WordPress, Blogger...