Everyone knows that past experience provides valuable lessons for the future. A review of retail brokerage’s history not only points out useful lessons but also inspires a rational perspective on its current malaise.

In a new report entitled “Lessons from Three Decades of Retail Brokerage,”Alenka Grealish, analyst at Celent Communications, provides a twenty-five year retrospective on the industry’s competitive landscape, product and channel innovations, and regulatory landmarks. It outlines enduring lessons that can be drawn from the industry’s past experiences. These lessons can be distilled into three imperatives:

• Do not underestimate the viability of product and channel innovations and investors’ receptiveness to them. There will always be the next “new-new” thing that will differentiate competitors and open the door to new entrants for at least the short-run.

• Remember that technological acumen is important to remaining competitive, and that product and channel innovations typically translate into lower cost-to-serve and broader market reach—not cannibalization

• Expect a merger or acquisition in order to overcome stagnant market and earnings growth. No competitor is too big or too independent to merge.