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At present, there are 150 securities firms across the country, and small and medium-sized brokerages account for the vast majority. As the industry's Matthew effect continues to intensify, the development path that smaller brokerages should take has become one of the topics the industry cares about most. A latest survey by the Securities Association of China on the development of small and medium-sized brokerages shows that 81.7% of surveyed practitioners said their firm has already clarified its layout in distinctive niche tracks, while 10.3% believe they have already formed distinctive business advantages. There is consensus on the direction of transformation; the difficulty lies in the path to implementation. In the survey, nearly 60% of practitioners endorsed a landscape in which "leading firms lead, distinctive segments develop, and regional deep cultivation coexists," and 46% of practitioners believed that small and medium-sized brokerages should focus on segmented tracks. The four potential tracks practitioners favor most are regional deep cultivation and coordination with local state-owned capital industries, inclusive wealth management and community investment advisory, specialized asset management, and distinctive investment banking. Overall, these tracks do not rely on heavy capital; they rely on deep service capabilities that stay close to the market and close to clients, and their common feature is "being closer to clients."

"Being closer to clients" is precisely where smaller brokerages have an advantage. Leading firms are strong in capital, brand and nationwide networks, and smaller brokerages find it hard to compete head-on in these areas, but regional markets, local industries and small and medium-sized enterprises are exactly where smaller brokerages can build distinctive strengths and depth. In other words, the way out for smaller brokerages is not to imitate the "big and comprehensive" model of leading firms, but to leverage their own endowment of being "close and deep," serving local clients thoroughly, researching regional industries thoroughly, and mastering segmented tracks thoroughly. How can they get "closer to clients"? In the survey, more than 60% of surveyed practitioners believed there is still room for further alignment between their institution's resource allocation and its differentiation strategy. Regional deep cultivation is not simply setting up a local branch, but truly pushing resources down to local industries, local clients and local service capabilities, which requires adjustments to organizational structure, supporting assessment mechanisms and the building of a talent pipeline, none of which can be missing. Only when strategy, resources and mechanisms are aligned can "being closer to clients" be transformed from a concept into real business capability.

In regional deep cultivation, smaller brokerages have a unique foundation. The survey shows that the core advantages of smaller brokerages are concentrated at the level of "geography and mechanisms": strong stickiness of local client groups, high team stability and flexible decision-making mechanisms. These advantages do not need to be rebuilt; they only need to be truly activated. The key to activation lies in shifting resources from "covering everything" to "achieving breakthroughs in key areas," increasing investment in the fields where they are most endowed rather than spreading effort evenly across all tracks. Changes on the demand side are also adding momentum to this breakthrough. The survey shows that more than 80% of investors have a strong demand for differentiated services from brokerages, and compared with differentiation in service form, investors value service professionalism more. The distinctive services they most look forward to are, in order, personalized investment advisory services, lightweight research services and refined fee discounts. This means that the advantage smaller brokerages built through "low fees plus high responsiveness" still needs to rise another level in professional capability. The value of regional deep cultivation lies precisely in the ability to form professional depth in specific fields that is hard to replicate: a deep understanding of local industries, precise grasp of regional client needs, and long-term accumulation of local policies and resources are differentiated barriers that leading firms find difficult to replicate quickly in the short term. If smaller brokerages can turn this "closeness" into "specialization" and upgrade "geographical advantages" into "professional advantages," they are expected to build differentiated moats in segmented tracks. Ultimately, the path to breakthrough for smaller brokerages is not to compete with leading firms on scale or branch coverage, but to compete on who is closer to clients and who is more deeply rooted in specific fields. "Being closer to clients" is the starting point of differentiated competition and also the direction of long-term development. Only by making their professionalism solid can smaller brokerages carve out a distinctive development path of their own.