NEW YORK — Officials of the securities industry, battered by losses in 1984, predicted Thursday that, in 1985, the industry will return to the basics of selling securities to individual investors. But they confessed that they face an uphill fight in holding on to their share of the market, and an industry-sponsored study suggested that brokerages do not understand exactly what their retail customers want.
At a meeting sponsored by the Securities Industry Assn., George Ball, chief executive of Prudential-Bache Securities Inc., said brokerages have allowed their skills in selling equities to "atrophy" in their eagerness to offer such new products as tax shelters, certificates of deposits and shares of money market mutual funds.
He said their inattention may have hastened the withdrawal of retail investors from the stock market. Revenue from the sale of securities to individuals dropped 60% between 1980 and 1984, he said, at a time when brokerages have also faced declining fees from institutional securities sales, rising costs and the looming threat that banks may soon be freed to act as investment bankers.
The U.S. Treasury Department's pending proposal to cut the value of tax shelters poses another threat, he said, since 35% of brokerages' retail sales are motivated by a desire to reduce taxes.