Organizational situation of private wealth management department in BIDV securities company (BSC)

Besides going into the main issue is the operation of the department, theauthor also describes an overview of the work practice, the business environment andthe provision of securities s

First of all, I would like to profoundly say thanks to my instructor - Mr NguyenViet Dung, Associate Professor.PhD, Lecturer of Foreign Trade University for hisconsiderate guidance during my whole mid-course internship period His instructionswere extremely useful for me to successfully complete the internship report

Furthermore, I am also grateful to Mrs Nguyen Thanh Hoa – Manager of Privatewealth management Department and all staffs there, who gave me an opportunity tointern and gain real practice in such a professional environment

Finally, I would like to say that I would really appreciate the internship time atBSC, which has helped to direct my future career

TABLE OF CONTENTS

TABLE OF FIGURES

Ho Chi Minh Stock Exchange

Ho Chi Minh City Securities CorporationKey Performance Indicator

Price to EarningSaigon – Hanoi Securities Joint Stock CompanyState Securities Commission of Vietnam

Saigon Securities Inc

Opening on November 26th 1999, BIDV Securities Company (BSC) is honor tobecome the first securities company in the Banking industry participating in theVietnam stock market As a pioneer, BSC is proud of its opening to operate as amultifunctional intermediary financial institution marked the start of the securitiesbusiness in general and careers of stock broker, investor and investment adviserparticularly in Vietnam Inheriting and bringing into play unrivaled experienceacquired from banking activities, especially in the field of credit analysis and projectappraisal for over 50 years of BIDV – the only state-owned commercial bankdesignated to be the settlement bank for Vietnam stock market by State SecuritiesCommission of Vietnam; with well-trained and experienced staff with highprofessional skills and business ethical standards; BSC has been effortlesslycontributing solid bricks to the first ground for the foundation and development ofVietnam stock market

However, compare with other leading securities companies in the industry, such

as SSI or HSC, BSC does not have a strength for investment consulting for institutionalclients As institutional clients are conservative and only choose familiar securitiescompanies with long time of collaboration to make deals with, BSC tend to focus onindividual clients – the open-minded clients that will choose any company offering thebest designated option for their investment The establishment of Private WealthManagement Department in 2015 is the move to approach individual clients of BSC,especially affluent clients

Therefore, over the time internship in BSC, along with applying knowledgeacquiring through the learning time at FTU, I had chosen the topic: “Organizationalsituation of Private Wealth Management Department in BIDV Securities Company(BSC)” Besides going into the main issue is the operation of the department, theauthor also describes an overview of the work practice, the business environment andthe provision of securities services; thus boldly put forth some measures to rectify andimprove some existing problems in the Private Wealth Management Department

The report contains three main chapters:

Chapter 1: A brief presentation on the establishment and development of BSC

and introduction about their functions, missions and the company’s structure The role

of Private Wealth Management Department in the company

Chapter 2: Describe the internship position Private Wealth Management

Department and other related department from practical perspective

Chapter 3: Comparison and comments on the operating activities of the

company, with some recommendations

Due to my limitation of knowledge, skills and experience, mistakes and faultsare inevitable I welcome all comments, advices and suggestions that help me improvethe quality of the report

Finally, I would like to express my gratitude to my instructor - AssociateProfessor PhD Nguyen Viet Dung and all BSC staffs for helping me complete mymid-course internship report.

1 Introduction about BSC and Private Wealth Management Department

1.1 General information about BSC

Trading Name: “BANK FOR INVESTMENT AND DEVELOPMENT OFVIETNAM

SECURITIES JOINT STOCK COMPANY”

Abbreviation : BSC

Certificate of business registration No: 111/GP-UBCK

Charter capital: VND 865,000 million

Owner’s equity: VND 869,135 million

Headquarter Address : 1st Floor, 10th – 11th floor, BIDV Tower, Ly Thai To Ward,

35 Hang Voi Street, Hoan Kiem District, Hanoi

Branch Address : 9th Floor, 146 Nguyen Cong Tru Street, District 1, Ho Chi Minh

City

Phone number: 84-4 39352722 / 84-8 38218508

Fax number: 84-4 22200669 / 84-8 38218510

Website: www.bsc.com.vn

Securities Code: BSI

Business: BSC is a securities company with following business scope:

- Brokerage

- Securities Investment

- Securities Underwriting

- Securities Depository

- Other activities specified by the laws

BSC's commitment throughout all aspects of operational activities - providingprofessional services to customers, increasing shareholders value through thesustainable economic growth indicators, building an attractive working environment,reducing operating costs and limiting the impact on the environment through Greenactivities

1.1.1 Core values, missions, visions and long -term development strategy

Contributing to the development of the stock market and delivering values to

clients, investors and shareholders of the Company

 Vision

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Restructuring the customer base toward sustainable development and safety

Maintaining and gradually improving the rank among top securities companies Transitioning toward an investment bank

 Long-term development strategy

BSC aims at higher growth rate than the average stable market level, relatively

independent from the market movements and affirming outstanding brands toward leading position in Vietnam securities market, increasing profit, and the workplace of

professional staff to achieve common objectives.

(Investment

Development Policy Committee

Risk Management Commitee Human Resource and

Compensation Committee Board of Management

Support

Research Dep.t

Research

Product Development Dep.t Fixed-Income Dep.t

Stock Investment

Dep.t

Investment

Fiancial Advisory Dep.t

Financial Advisory

Support Unit Dep.t

Private Wealth Management Dep.t

Institutional Client Dep.t

Investment Consulting

Plan & Marketing Dep.t

Dep.t Administration Dep.t

IT Dep.t Risk Management Dep.t Internal Control Dep.t Securities Service Dep.t

Financial Accounting

Branch in Ho Chi Minh City

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1.2 General information about Private Wealth Management Department

1.2.1 Functions of Private Wealth Management Department

Private Wealth Management is an investment advisory practice that incorporatesfinancial planning, portfolio management and other aggregated financial services forprivate individuals, not for corporations, trusts, groups or other types of clients

From the private client's perspective, private wealth management is the practice ofsolving or enhancing her financial situation and achieving her short, medium and longterm financial goals with the help of a financial adviser From the private financialadviser's perspective, private wealth management is the practice of delivering a fullrange of financial products and services to an affluent client as a financial consultant sothat the client can achieve specific financial goals

Securities companies as well as fund management firms or asset management firms offer various kinds of investment products to individuals, although many private individuals lack the time, effort or knowledge to manage their finances successfully Tomake up for what may be lacking, private individuals seek the consultation of wealth managers who specialize in managing the finances of private individuals

Established in May 2016, Private Wealth Management Department is a newdepartment under Investment Consulting unit The department contains 6 employees,manage over 200 private clients, including large, medium and small clients Becausethe department still a demo, in fact, the team work like a private brokerage team Thebusiness results are also included with the total business results of BrokerageDepartment Nevertheless, staff of Private Wealth Management Department areconsidered to be more specialized and well-trained, with strong background insecurities investment field than staffs of Brokerage Department

Private wealth management is a young business in Vietnam, account for a verysmall part of revenue in each securities companies, fund management firms or assetmanagement firms For BSC, in the future, when the amount of clients reach aadequate number, they will divide the clients into groups, each group have differentcare regimes, policies and fee The affluent clients will be focused on, with specialprivilege from the department High-net-worth individuals have unique financialsituations that require greater diligence and a higher degree of active management.Further, high-net-worth individuals require a more holistic approach to investmentmanagement than many financial advisers are capable of providing They can haveissues with income taxes, estate planning, investment management and other legalissues that need more attention and specific expertise than traditional investmentadvisers are qualified to give

Because Private Wealth Management Department is a small newly developeddepartment, it does not have any document about its operating mechanism ormanagement mechanism All the information of the department come from consultingthe manager – Mrs.Hoa and other staffs

1.2.2 Obligation of Private Wealth Management Department staffs

The obligation and accountability of Private Wealth Management Department staffs related with wealth management process, to go into details are:

• The wealth manager sits down with the private individual and goes over thefinancial goals that the client would like to attain Then, the wealth managerputs together an investment strategy to help that person achieve her goals

• The wealth manager manages the client's money and invests in the investmentproducts that make sense for the client

• Although securities firms in the world offer private wealth management serviceswith a variety of advisers and expertisers that provide guidance across a widespectrum of investments including cash, fixed income, equities and alternativeinvestments; BSC as well as other large securities companies in Vietnam thathave private wealth management department just advise on choosing stockportfolios for clients

• Every staff have to write various reports and send to clients on a week/monthbasis

• If there are any new information about the corporations that clients invest in,their staffs have to send to the clients as soon as possible

• Regularly make recommendations for new investment for individuals

• Follow accounts of the clients very carefully to remind them about the condition

of the accounts

• When account of one individual is closely fall to maintenance margin, remind

he immediately to avoid margin call

Also, there are two types of clients, and each type of clients have different fee:

o The clients has authorized the wealth manager to wholly handle theiraccounts

o The clients trade by themselves, only receive information andrecommendations from wealth manager

When a new individual open account in BSC, depend on their need, they mayseek an offer to use private wealth management services This is the case of individualsthat the company assigned to Private Wealth Management Deparment to take care of.Other case is the staff of Private Wealth Management Deparment searched for clients

by himself In that circumstance, the staff will receive higher fee than fee from theclients assigned by the company

Each account was designed for a specific individual, with specific demand ofreturn and level of risk tolerance Staff to be in charge of individual will specify theirneed and make different portfolios for different individuals The choices of adding anystock in the portfolio are make by the staff himself, do not need approval from themanager or other members of the department

Staffs of Private Wealth Management Deparment are enthusiastic, experienced,with good technical knowledge and good communication skill to fulfill therequirements of the functions and tasks that the department and BSC proposed High

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working efficiency, graduated from prestigious universities, this is the factor of humanresources management that makes the success of the Private Wealth ManagementDeparment in particular and BSC in general.

2 Internship job’s description

Staffs of BSC start to work at 8.30 am until 11.45 am, back to work at 1 p.m andclose the day of work at 5.30 pm However, hardly any staff leave the office at exactly5.30 pm They continue to work for about fifteen minutes, and ordinary staffs, oftenyoung staffs leave the company The old staffs and especially the managers stay at theoffice over 6 pm or even later 6.30 pm or 7 pm The working environment is strict,during working time staffs seldomly exchange conversations or chatting When time-off for lunch, some light bulbs have been turned-off, so at 1 pm, the staffs turn on thelight and back to work I observe that the time they turn on the light maybe earlier than

1 pm, but never later than for 1 pm even one minute So punctuality has became asignature trait of BSC staffs, everyone comply with the time regulated by apperception,

no one need to be reminded

On the first day of internship, I was introduced to the whole people in the room

by Mrs Hoa – the manager of Private Wealth Management Deparment ProductDevelopment Department have shared the same room with Private WealthManagement Department, and my desk was between Product DevelopmentDepartment staffs I could observe not only how staffs of my department work, but alsohow Product Development Department staffs work

Later on, Ms Tien – a staff from Administration Department came to the roomand asked to follow her I was introduced to the time machine system – a tool to checkthe punctuality of staffs After the time machine took my fingerprint, I was told aboutthe schedule of BSC employees I had to be at the office no later than 8.36 am, with thetime machine checking my fingerprint to record the time I come When the work time

of the day came to an end, before leaving the office, I had to be checked with the timemachine again Time machine prevent employees to be late for work, with no excusefor bad weather or traffic jam All staffs have to wear uniforms at work, except forFriday, they can wear normal apparel As an intern, I did not have the uniform, so Icould dress up normally with only one rule: my shirts or t-shirts have collar

I was given an email of BSC: gianghn@bsc.com.vn It came to me as a surprisethat even an intern like me got a private working email from the company From thevery first hour in BSC, I had the strong impression about the professional workingenvironment and the strict management system If someone has a phone call whileworking, he will immediately leave the room to keep silence for other colleagues.Everybody works highly focused, which create a tension throughout the room

The first thing I learnt was the way staffs connect with each other and with theclients: through a chatting app – Skype There were staffs even use two computer orone computer and one laptop while working: one screen displays stock board, onescreen displays conversations with clients and other staffs from different department