báo cáo thực tập giữa khóa organizational situation of private wealth management department in BIDV securities company (BSC)

FOREIGN TRADE UNIVERSITY FACULTY OF FINANCE AND BANKING *** MID-COURSE INTERNSHIP REPORT Organizational situation of Private wealth management Department in BIDV Securities Company (BSC) Full name : Hoang Ngan Giang Student ID : 1313340013 Class : A9 – High quality class Intake : 52 (2013 - 2017) Instructor : Associate Professor PhD Nguyen Viet Dung Hanoi, 8/2016 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT First of all, I would like to profoundly say thanks to my instructor - Mr Nguyen Viet Dung, Associate Professor.PhD, Lecturer of Foreign Trade University for his considerate guidance during my whole mid-course internship period His instructions were extremely useful for me to successfully complete the internship report Furthermore, I am also grateful to Mrs Nguyen Thanh Hoa – Manager of Private wealth management Department and all staffs there, who gave me an opportunity to intern and gain real practice in such a professional environment Finally, I would like to say that I would really appreciate the internship time at BSC, which has helped to direct my future career LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS PREFACE 1 Introduction about BSC and Private Wealth Management Department 1.1 General information about BSC .2 1.1.1 Core values, missions, visions and long-term development strategy .2 1.1.2 Organization structure 1.2 General information about Private Wealth Management Department 1.2.1 Functions of Private Wealth Management Department 1.2.2 Obligation of Private Wealth Management Department staffs Internship job’s description Comparison and explain the relationship between knowledge and reality Some recommendations for Private Wealth Management Deparment in particular and for BSC in general 11 3.1 Knowledge and reality .11 3.2 Recommendations 14 3.2.1 BSC in general .14 3.2.2 Private Wealth Management Deparment in specific 15 CONCLUSION 16 REFERENCES 17 TABLE OF FIGURES Figure 1-1: Organization structure of BSC LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABBREVIATIONS Abbreviation BIDV BSC Dept FCFE FTU HNX HOSE HSC KPI P/E SHS SSC SSI Stands for Bank for Development and Investment of Vietnam BIDV Securities Company Department Free Cash Flow to Equity Foreign Trade University Hanoi Stock Exchange Ho Chi Minh Stock Exchange Ho Chi Minh City Securities Corporation Key Performance Indicator Price to Earning Saigon – Hanoi Securities Joint Stock Company State Securities Commission of Vietnam Saigon Securities Inc LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com PREFACE Opening on November 26th 1999, BIDV Securities Company (BSC) is honor to become the first securities company in the Banking industry participating in the Vietnam stock market As a pioneer, BSC is proud of its opening to operate as a multifunctional intermediary financial institution marked the start of the securities business in general and careers of stock broker, investor and investment adviser particularly in Vietnam Inheriting and bringing into play unrivaled experience acquired from banking activities, especially in the field of credit analysis and project appraisal for over 50 years of BIDV – the only state-owned commercial bank designated to be the settlement bank for Vietnam stock market by State Securities Commission of Vietnam; with well-trained and experienced staff with high professional skills and business ethical standards; BSC has been effortlessly contributing solid bricks to the first ground for the foundation and development of Vietnam 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 institutional clients As institutional clients are conservative and only choose familiar securities companies with long time of collaboration to make deals with, BSC tend to focus on individual clients – the open-minded clients that will choose any company offering the best designated option for their investment The establishment of Private Wealth Management 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 knowledge acquiring through the learning time at FTU, I had chosen the topic: “Organizational situation of Private Wealth Management Department in BIDV Securities Company (BSC)” Besides going into the main issue is the operation of the department, the author also describes an overview of the work practice, the business environment and the provision of securities services; thus boldly put forth some measures to rectify and improve 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 faults are inevitable I welcome all comments, advices and suggestions that help me improve the quality of the report LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Finally, I would like to express my gratitude to my instructor - Associate Professor PhD Nguyen Viet Dung and all BSC staffs for helping me complete my mid-course internship report Introduction about BSC and Private Wealth Management Department 1.1 General information about BSC Trading Name: “BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 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 - providing professional services to customers, increasing shareholders value through the sustainable economic growth indicators, building an attractive working environment, reducing operating costs and limiting the impact on the environment through Green activities 1.1.1 Core values, missions, visions and long-term development strategy  Core values  Quality of staff  Corporate culture  Technology infrastructure  Mission Contributing to the development of the stock market and delivering values to clients, investors and shareholders of the Company  Vision Restructuring the customer base toward sustainable development and safety LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 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 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com professional staff to achieve common objectives 1.1.2 Organization structure General Shareholders Meeting Supervisory Board Figure 1-1: Organization structure of BSC Board of Directors Councils (Investment Council…) Internal Control Committee Development Policy Committee Risk Management Commitee Human Resource and Compensation Committee Board of Management Investment Financial Advisory Investment Consulting Support Research Securities Service Dep.t Stock Investment Dep.t Fiancial Advisory Dep.t Fixed-Income Dep.t Institutional Client Dep.t Research Dep.t Internal Control Dep.t Product Development Dep.t Support Unit Dep.t Risk Management Dep.t IT Dep.t Private Wealth Management Dep.t Administration Dep.t Plan & Marketing Dep.t Dep.t (Source: Annual report of BSC in 2015) Financial Accounting Branch in Ho Chi Minh City LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 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 incorporates financial planning, portfolio management and other aggregated financial services for private individuals, not for corporations, trusts, groups or other types of clients From the private client's perspective, private wealth management is the practice of solving or enhancing her financial situation and achieving her short, medium and long term financial goals with the help of a financial adviser From the private financial adviser's perspective, private wealth management is the practice of delivering a full range of financial products and services to an affluent client as a financial consultant so that 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 To make 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 new department under Investment Consulting unit The department contains employees, manage over 200 private clients, including large, medium and small clients Because the department still a demo, in fact, the team work like a private brokerage team The business results are also included with the total business results of Brokerage Department Nevertheless, staff of Private Wealth Management Department are considered to be more specialized and well-trained, with strong background in securities investment field than staffs of Brokerage Department Private wealth management is a young business in Vietnam, account for a very small part of revenue in each securities companies, fund management firms or asset management firms For BSC, in the future, when the amount of clients reach a adequate number, they will divide the clients into groups, each group have different care regimes, policies and fee The affluent clients will be focused on, with special privilege from the department High-net-worth individuals have unique financial situations that require greater diligence and a higher degree of active management Further, high-net-worth individuals require a more holistic approach to investment management than many financial advisers are capable of providing They can have issues with income taxes, estate planning, investment management and other legal issues that need more attention and specific expertise than traditional investment advisers are qualified to give Because Private Wealth Management Department is a small newly developed department, it does not have any document about its operating mechanism or management mechanism All the information of the department come from consulting the manager – Mrs.Hoa and other staffs LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 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 the financial goals that the client would like to attain Then, the wealth manager puts together an investment strategy to help that person achieve her goals  The wealth manager manages the client's money and invests in the investment products that make sense for the client  Although securities firms in the world offer private wealth management services with a variety of advisers and expertisers that provide guidance across a wide spectrum of investments including cash, fixed income, equities and alternative investments; BSC as well as other large securities companies in Vietnam that have private wealth management department just advise on choosing stock portfolios for clients  Every staff have to write various reports and send to clients on a week/month basis  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 their accounts o The clients trade by themselves, only receive information and recommendations from wealth manager When a new individual open account in BSC, depend on their need, they may seek an offer to use private wealth management services This is the case of individuals that 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 the clients assigned by the company Each account was designed for a specific individual, with specific demand of return and level of risk tolerance Staff to be in charge of individual will specify their need and make different portfolios for different individuals The choices of adding any stock in the portfolio are make by the staff himself, not need approval from the manager 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 the requirements of the functions and tasks that the department and BSC proposed High LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com working efficiency, graduated from prestigious universities, this is the factor of human resources management that makes the success of the Private Wealth Management Deparment in particular and BSC in general Internship job’s description Staffs of BSC start to work at 8.30 am until 11.45 am, back to work at p.m and close the day of work at 5.30 pm However, hardly any staff leave the office at exactly 5.30 pm They continue to work for about fifteen minutes, and ordinary staffs, often young staffs leave the company The old staffs and especially the managers stay at the office over pm or even later 6.30 pm or pm The working environment is strict, during working time staffs seldomly exchange conversations or chatting When timeoff for lunch, some light bulbs have been turned-off, so at pm, the staffs turn on the light and back to work I observe that the time they turn on the light maybe earlier than pm, but never later than for pm even one minute So punctuality has became a signature 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 Product Development Department have shared the same room with Private Wealth Management Department, and my desk was between Product Development Department staffs I could observe not only how staffs of my department work, but also how Product Development Department staffs work Later on, Ms Tien – a staff from Administration Department came to the room and asked to follow her I was introduced to the time machine system – a tool to check the punctuality of staffs After the time machine took my fingerprint, I was told about the schedule of BSC employees I had to be at the office no later than 8.36 am, with the time 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 time machine again Time machine prevent employees to be late for work, with no excuse for bad weather or traffic jam All staffs have to wear uniforms at work, except for Friday, they can wear normal apparel As an intern, I did not have the uniform, so I could 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 surprise that even an intern like me got a private working email from the company From the very first hour in BSC, I had the strong impression about the professional working environment and the strict management system If someone has a phone call while working, 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 the clients: through a chatting app – Skype There were staffs even use two computer or one computer and one laptop while working: one screen displays stock board, one screen displays conversations with clients and other staffs from different department LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Securities company prefer Skype as a way to communicate, and they have many private chat rooms to discuss about investment and information about various stocks Using Skype is a fast way to transmit information and small data from both sides of the conversations, and also more secure compare with using phone calls, as calls are easily heard by nearby people and can lead to distort information I also exchanged conversation about work with other staffs and the manager through Skype If you want to work for a securities company, firstly, register a Skype account Secondly, after asking my friends also work at other securities companies, I wondered why all the companies start to work at pm, with short lunch break Later on, when I learnt some basic things about the stock exchange, I knew that the stock exchange continues to trade at pm after the break, so at that time, staffs of securities companies also have to update information straightway from the stock boards BSC headquarter locates at only the 10 th and 11th floor of BIDV Tower Related departments are arranged to work at the room near each others, and staffs from different departments usually come to other departments to share information or ask about reports and even consult the managers All the departments work closely, backup and support each others For instance, Product Development Department research on the needs and expectations of investors, attitudes and decisions of the investors Then, from those researches, they develop the new features of the products, services tailored for individuals, help Private Wealth Management Department to offer various kinds of investment products and services for clients Human resources are employed toward specialization, but closely linked for the sake of best results in working efficiency On my first day at work, Mrs Hoa told me to enter BSC website: https://www.bsc.com.vn/ to learn about BSC and wait for further instruction After hours reading several articles on BSC website, I could have the basic understanding of BSC including the company’s business, structure and working culture I finished reading the website early, and decided by myself to look for information of BSC in the internet From various articles from electronic newspaper such as CafeF or VnEconomy to some forums of investors, I came to realize some basic information about the performance of BSC They are on the list of ten securities companies with largest market share, and also one of ten highest revenue securities companies BSC’s leading business is trading and offer brokerage services for bond They have positioned first for securities company in the bond market, their market share in the bond market is far larger than in the stock market However, unlike stocks, bonds brokerage fees are much lower For example, the tariff given by the BSC, with bond transactions worth over 10 billion VND, brokerage fees was only 0.02%, so the turnover rate of the total value of BSC with large bond trading much lower than the average level In the near future, as Circular 06 come into force, government bond markets will be more dynamic and developed in the future, increase capital mobilization channel from government bond issuance It will be an opportunity for BSC to boost up their revenue from trading debt securities LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com At some forums for investors, BSC was complimented as good at consulting for individuals, staffs give recommendations carefully and enthusiastically However, after taking advices from BSC, individuals said they tend to use account at other securities companies to order stocks, the reasons left unsaid After weeks at BSC, hearing conversations between managers and staffs, I know that BSC set the margin for trading stocks at too low Individuals often not have much money to invest in a large amount of stocks, so they want to borrow from securities companies to finance their investment, use leverage to increase profit Some stocks BSC even don’t set margin for, which means investors have to order that stocks completely with their money Trading with low margin or no margin deteriorate investors profit, and BSC lose their clients because of their tighten policies of giving margin Secondly, after having background information about BSC, I was sent via email by Mrs Hoa a folder contains Law on securities 2010, Decree No 86/2016/ND-CP of the Government on requirements for investment and trading in securities, Decree No 60/2015/ND-CP, Decree No 58/2015/ND-CP, all the legal normative documents related with investment in securities Mrs Hoa told me to note down the interpretation of terms of securities instruments, securities organizations and related parties in trading securities I learnt basic definition of Vietnam securities market, and how government regulate and supervise activities in the trading market Feeling the legal documents not provide enough information to understand how stocks have been traded, as well as the stock market in reality in Vietnam, I borrowed from my friends some documents and books about real life securities in detail Besides textbooks about securities investment and analysis, I read documents from Ho Chi Minh Stock Exchange, Hanoi Stock Exchange and The Securities Research and Training Center I knew a lot of knowledge and information about stocks: features of three stock exchanges; methods of trading: how to read the stock board, types of prices, types of orders, schedule of trading and payment; terms in the market; types of analysis: fundamental analysis and technical analysis; process of analysis: macromarket analysis, industry analysis and company analysis, Exchange Traded Fund (ETF), VN-Index and HNX-Index, put through trading When Mrs Hoa presented to me a stock board and told me how could a company to be listed in HOSE and I said I already knew about it through searching, she seem to be satisfied She told me if I felt confident about my basic knowledge of securities, I could move on and read some electronic newspaper, such as CafeF, and read articles about securities market in Vietnam I read about blue-chips, reliable stocks in different industries, some “hot” stocks at the moment, potential stocks, daily market information, trend in the market, new regulation of government for stock market Everyday I went to check the changes in price of stocks in the stock board, note down the changes of some potential stocks Mrs Hoa suggested me to register a virtual account and try to trade stocks as a beginner There were many magazines and newspaper about financial market in the office, so in the spare time, the staffs and me LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com picked up some to read This is the effective way of acquiring information about the market that BSC bring to staffs Moreover, in two final weeks of the internship period, I was given reports of BSC from the staffs The reports came from the whole Investment Consulting Unit At first, I started with marcromarket reports, which gave me the overview of the whole economy in Vietnam, summarize events in the stock market and forecast about the securities market in the near future Secondly, I continued with industry reports: construction industry, pharmaceutical industry, textile industry, real estate industry, banking industry, steel industry and so forth Analysed from the economy of scale to the business cycle of the industry, and compared with others industry, estimates the risk and return of the industry I highlighted some prospective companies of each industry, and search for these companies reports, not only companies reports from BSC which I was given, but also reports from other securities companies I focused on the business model, the competitors, the board of management of the firm After that, I read their financial statements and their financial ratios carefully, try to figure out the financial condition of the companies behind these numbers It failed me when I try to read technical analysis reports, as the knowledge I got from the university can not help me to understand about technical analysis, none of the subjects in the school is related with that type of analysis Step by step, when I feel like I have comprehended a little more about my focused firms, I watched out their prices in the stock board day by day, besides observe prices of blue-chips in VN-30 and HNX-30 Mrs Hoa told me to read books about equity valuation, especially popular methods such as P/E ratio (Price to Earning ratio) and FCFE (Free Cash Flow to Equity) FCFE is suitable for firms that not pay dividend or pay dividend less than earning cash flow FCFE estimates enterprise value in the long run and sensitive to discount rate as well as assumptions of analyst, so its weakness comes from depending excessively on assumptions Assumptions must be logical and rational to product an accurate results Using P/E ratio also is a useful and easy method for investors to evaluate stocks This method focus on the profitability of stock, and is widely used and approved by most of investors However, EPS (Earning per Share) can be negative and manipulated by accountants, and using P/E ratio to compare with other companies an from year to year is troublesome because of the variation of income Staffs with experiences tend to capture the abnormal factor in the financial statements at a glance to conclude that stock has been overpriced or underpriced When I said I want to learn how to read financial statements quickly, other staffs told me that it had been the common sense of an analyst, something you can learn by watching but no one can teach you That moment I understood better the importance of experiences in working The best part of learning is watching staffs of Product Development Department exchanged conversations with the manager Sit next to my desk is Mr Khai, a staff from Product Development Department He often be reprimanded as he submitted the reports late The manager of his department commented on his reports that it were overlong, up to over ten pages Mr Khai was told to summarize information and rewrite the reports, the maximum length was five pages The manager said that, a 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com overlong report diluted the crucial information that the readers of reports should focus on, and the report just presented main points briefly and in a direct way At one Friday, Mr Khai was asked when he could turn in the report, his answer was Monday of the next week His manager said if he could not submit the report in this week, he had one week more to prepare it carefully It came to me that every reports in BSC must be written with efforts of analyst, and the manager would supervised the output of reports thoroughly before actually use it for other purposes As Product Development Department affliated with Board of Management, their projects and products are monitored directly by member of Board of Management Mr Le Quang Huy - Deputy General Director of BSC, paid a great deal of attention to the results of Product Development Department For weeks, he even went to the room of this department at the afternoon and sit there to work and supervise every staffs of the department worked Mrs Hoa told me that he often left the room in p.m, after long hours discussed with the manager of Product Development Department about their strategies Mr Le Quang Huy remembered all the staffs in the room, which surprised me He concerned about the products in detail, asked each staffs about their tasks and their opinions He even arranged all the desks of the staffs in Product Development Department so they sit together and work closely like a team, make it easier when exchange ideas Product Development Department have responsibilities for setting the margin for each stocks, a vital task that affect the performance of the whole company As I said before, margins that BSC provide for investors are low, compare with other securities companies Dealing with margin is an intricate part of the job that trouble from the staffs to the manager of the department, and even a great concern of the Deputy General Director – Mr Le Quang Huy When Mr Khai cut the margin of KSB – Binh Duong Mineral and Construction Joint Stock Company – a stock with large trading volume, he was reprimanded by Mr Le Quang Huy The Deputy General Director asked, if Mr Khai was a individuals with limited capital but want to invest in KSB stocks, how could he finance this investment without margin from the securities companies, not to mention KSB was a stock with high price in HOSE With the price approximately over 60000 VND for one stock, individuals with small amount of capital can not order a moderate number of KSB stocks This wrong decision made Mr Khai received a cut in his KPI When I first heard of KPI, it was a complete strange term that I never be encountered before Every staffs in the room talked about KPI at the time near the closing of a month, so I searched to know about this term After that, I understood KPI was stands for Key Performance Indicator, a type of performace measurement Each department hace different criterions to scale the KPI for employees It was a way BSC use to assess performance of departments and staffs, to bring appropriate encourages for employees, together with reward and punishment for each individuals and department Reading about KPI gave me the insight of the method firms nowadays use to evaluate the job performance 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com One thing I admired in Mr Le Quang Huy was his incredible memory to remember all the characteristics of each staffs One day he asked one staff from Product Development Department about his professional certificate, the reasons why he started work in BSC from last year but until now still did not get the certificate, and reminded him to take the certificate as soon as possible I searched in the internet again and discovered employees in stock company need to have professional certificate in securities trading issued by State Securities Commission of Vietnam When I went to the recruitment section of some securities companies, many positions required this certificate, or at least a commitment of applicants to acquire the certificate within one year from the time they were admitted for the jobs Individuals have to take many courses in The Securities Research and Training Center and pass the examination at the end of each courses to be qualified for the professional certificate, so that required a lot of time to get the certificate This means any students want to take part in a securities companies must know about the qualification for the certificate early to set plans for learning After a sufficient time intern in BSC, I asked some staffs of my department, especially my supervisor – Mrs Hoa about their perception of my ability, and also my strengths and weaknesses I was complimented on my willingness to learn as well as my ability to observe and search for things to learn by myself However, my communication skill was quite not good I was suggested by Mrs Hoa to pay attention to the jobs of back office departments, such as Financial Risk Management Department and Internal Control Department, which more suitable with my capability and adding value to my path of career Other staffs told me how other departments in the company work and connect with each others, and the tasks that each departments have to handle Also, for each direction of work, I was told what certificate I should get and what skills I have to specialize in The staffs even discuss with me whether I should continue to study master degree right after graduating from the university, or go to work for a few years to get the experiences in reality After those talking, I had some guidance for my future jobs and learning path, and listened to practical experiences when worked in different departments in securities companies and commercial bank, all are valuable things to share from senior staffs In Private Wealth Management Deparment, each staff manage their own clients and accounts, they meet up and talk directly with individuals to consult about the portfolios, so I had a few chances to have real work and practice, even I always ask if I can support other staffs in their works Everyone is busy, so I decided to search for documents to read, and ask if there is anything I could not understand and comprehend completely, I could seek the helps from my department staffs In my opinion, the time of internship mainly help me increase my networking and explore the working environment in BSC As firms in Vietnam usually not have training department, when you first come to work, you have to learn everything from the start, but people often not have time to instruct you, so watching and learning is useful and crucial part to get used to the job Internship gave me an opportunity to enhance my softskill and compare my knowledge from school to the job in real life 12 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Comparison and explain the relationship between knowledge and reality Some recommendations for Private Wealth Management Deparment in particular and for BSC in general 3.1 Knowledge and reality Before my internship time in BSC, I have learnt the subject Securities Investment in school, which supposed to help me gain basic knowledge of the stock market and trading securities, as well as equity evaluation However, when I came to intern at a securities companies, I hardly knew anything about the real condition of stock market in Vietnam For that reason, I had to gather all the documents and books and newspaper to read in order to know how investors traded stocks in Vietnam The first thing I want to mention is that, most of the subjects in my course just focus on theories in textbooks, lack of practicality My course is High quality program, all the major subjects we learnt are taught with American textbooks, which means there is no feature of Vietnam market we can find in the books Throughout Securities Investment subject, we have learnt a lot about securities and other models to evaluate equity, however, after passing the subject, I did not even know there are three stock exchanges in Vietnam market All I have heard are stocks from HOSE and HNX, so when Mrs Hoa told me there is still one more stock exchange, UpCom stock exchange, I felt shameful for my lack of knowledge In the class, we never been taught how to read a stock board, how many types of order that we have in Vietnam, or even the differences of HOSE and HNX Why a company is listed in HOSE but not HNX, if I did not have done the researches myself, I could not get the answer from what I learnt in university We calculated the initial margin and maintenance margin for stocks, we knew the formula, but the real margin in each prospective stocks that vary from different securities companies, we have never seen that Different industries bring different risks and returns which vary from each period in the year, but I did not learn about it at school We have never done any research of industries even when we had assignments Until now, my friends which did not intern in a securities companies, still not know that when we analysis a stock, we have to read not only that company report, but also macromarket reports and industry reports We have never been introduced of any blue-chips in the class, or some high-growth stocks in each industry Except for some students who had been traded stocks for years on their own, most of the students in my class not have any ideas of what is going on in the stock market Even the staffs from Investment Consulting Unit have to go to enterprises and meet up with managers and directors of the firm to carry out the reports, they not just sit in the office and look at financial statements to have information for the reports One staff from Private Wealth Management Deparment told me, when you graduate and go to work, you have to start from scratch: almost everything you have learnt are not useful when it comes to real work Secondly, lecturers through many subjects have never told us about organization structure of a commercial banks or a securities companies We have no idea about the job we should pursue according to our abilities Our school lacks of career guidance for students Each department in financial institutions in general have different traits, and 13 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com the recruitment team want to have applicants that already knew about the positions they apply for As one senior told me, to make my curriculum vitae “selling” good, I have to add in the form factors that compatible with the job I apply for A staff of Institutional Client Department is assessed different from a staff of Financial Risk Management Department The lecturers also never told us what knowledge from the subjects we learnt can applied in what department in financial organizations I supposed we should been told if our dream to be work in treasury department, for instance, what subjects we should focus on and what those subjects will help us in our jobs Moreover, the students not know with their interests and abilities, what jobs they should applied for in the future, and whether the jobs can lead them in their career paths From my point of view, Foreign Trade University not only need to educate students, but also train them to meet the professional qualification of recruitment team in the finance field Thirdly, each jobs require different qualifications, such as different certificate I have never heard of professional certificate in securities trading issued by State Securities Commission of Vietnam before It is a must have certificate if you want to work in a securities company There are three types of professional certificate: professional certificate for brokerage, of professional certificate for financial analyst, professional certificate for fund management You have to finish courses for brokerage certificate, courses for financial analyst certificate and courses for fund management certificate in order to acquire the approval from State Securities Commission of Vietnam It’s quite a long time needed to finish those courses, and students have orientation towards securities field should know about those courses early In my class, all students know about the Chartered Financial Analyst (CFA) program, but they not understand fully the opportunities for those people who obtain this certificate or the knowledge after learning CFA will be useful in what jobs and positions Just some students know about Financial Risk Manager (FRM) certificate, a qualification for risk management professionals, particularly those who are involved in analyzing, controlling, or assessing potential credit risk, market risk, and liquidity risk as well as non-market related financial risks FRM holders perform a broad variety of functions related to risk management within investment banks, asset management firms, as well as in corporations and government agencies With the application of Basel in some big commercial banks, the need for human resources with good technical knowledge in risk management field is increasing, and FRM certificate is considered adding a significant value in curriculum vitae Hardly anyone has known about Chartered Market Technician (CMT) program, a professional designation that confirms proficiency in technical analysis of the financial markets It takes a long time to study and pass the exams required as well as have enough years of experience to be qualified for those certificates, so students should know and plan for the course of study early Because students often are unaware of the requiments of recruitment, lecturers with many years of experience should mention to them about some professional programs and the road to acquire certification from those programs 14 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com However, I have to say that all the subjects I have learnt in Foreign Trade University has helped me to prepare background knowledge in finance and banking field, which like a foundation for my further education I can not learn all the new things quickly like that without having basic knowledge from school When I read the analysis reports, they use the methods I have learnt through some subjects: Dividend Discount Model (DDM), Capital Asset Pricing Model (CAPM), Arbitrage Pricing Theory (APT), Weighted Average Cost Of Capital (WACC) They evaluate equity using Price to Earning (P/E) ratio and Free Cash Flow To Equity (FCFE) SWOT analysis and PESTEL analysis have been used widely when assess companies compare with other companies in the industry Every single subject, from Skill Development to Financial Reporting Analysis, even they are from my major or not, has improve my abilities as well as other skills needed for work 3.2 Recommendations 3.2.1 BSC in general Generally speaking, the operating activities of the firm is acceptable and relatively stable Having been backing up by BIDV, one of “Big 4” commercial bank in Vietnam, BSC have a large capital base In consultancy activities, BSC can approach big clients from BIDV and get many worthy consulting contract However, competition among securities companies become increasingly fierce in the form of reduced fees, hired qualified employees Differentiation between top companies with the remaining companies increasingly powerful while BSC has restrict on the size compared with rivals which makes the company has limits on margin lending services and the upcoming derivative securities Compare with big securities companies such as SSI or HSC, BSC not have advantages over institutional clients Institutional clients tend to favor top companies they have traded securities with for a long time BSC should focus on individual clients, because individuals choose stock companies only bases on their services, from consultancy and order system and their charges on fees as well as their margin lending BSC should improve their trading website to make sure it works well even in rush hour, besides offer a competitive level of fees Big securities firms like SSI or HSC often have high fees and this is a disadvantage for individual with large investment BSC also need to attract high qualified employees for brokerage field, to offer a better consulting services for customers, as their revenue from brokerage unit account for a large part of total revenue Margin lending is a different story Low margin level of BSC always a dissapointment for investors To attract individuals, BSC has to enhance their margin lending services, as well as take part in the derivatives market In 2016, BSC has a plan to increase chartered capital by two methods: private offering stocks for some financial investors and issue shares to pay dividends for public Also, they want to “loose room” for foreign investors to attract capital from this group of investors If the plan is going to be successful, BSC will have more capital to increase margin lending and join in derivatives market – a new and prospective market 15 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com BSC increase chartered capital also means BIDV's influence on BSC will fall The reduction in the ownership of the Bank lead to prediction that BSC’ stock can become more attractive for investors Because from the time BSC go public (2011), the percentage of BIDV’s holding at BSC unchanged consecutive years, the Bank retains the right to control the entire operation at BSC In the future, if BIDV has reduced its ownership in the BSC, the relationship mother and child between BIDV and BSC will continue to help BSC build and exploit the long term relationship with corporations, industry-leading businesses – the clients of BIDV Through the time at BSC, in my opinion, the working environment in this company still less affable and sociable Even I interned in a front office department specialized in individual clients, which means the staffs have to communicate with individuals for the most part of work, most of staffs in my room still are reserved There is a tension across the room While I was talking with my friends who interned in commercial banks and other securities like SSI, SHS, they told me the staffs in their office were friendly and outgoing Through contact with staffs from other financial institutions, I must admit that they are more open-minded and dynamic From my perspective, BSC should influence staffs to be more gregarious and flexible 3.2.2 Private Wealth Management Deparment in specific Private Wealth Management Deparment is a new department in BSC, so the scale of the department still small and the amount of clients is just fairly average In the future, when the number of clients reach a high level, they will divide clients into groups and the high-net-worth individual will receive special services with different fees Increasing work efficiency and customer services to attract more individuals, this is the mission of staffs Private Wealth Management Deparment BSC receive a large amount of clients from BIDV, and Private Wealth Management Deparment also rely most on clients from BIDV This dependence lead to staffs inexperiences of finding clients To acquire more portfolios from individuals, each staffs need to focus on searching for clients and catch up with the need of individuals Each individual has different motivation and requirements for their portfolios, so staffs need to balance their requiments with the portfolios returns to meet the expectations of clients Marketing for Private Wealth Management Deparment is still not to be concerned by Board of Management Individuals often unaware of this new department and the services they offer Besides bring exceptional services to clients, BSC need to promote about the image of the department and the results of returns in individual portfolios Private wealth management is a newly developed department in some securities companies, so this department of need to have distinction to compete with other stock companies, such as low fee, high qualified staffs Individuals have to know that if they use services from Private Wealth Management Department, they will have superior advantages compare with only use brokerage services Their portfolios must have some guarantee factors worth the fees they pay for the services 16 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CONCLUSION BSC is one of the most important subsidiary of BIDV and have been brought a large amount of revenue for BIDV as BSC has a prime position in securities market which has recovered from crisis and become more and more dynamic and developed Besides some limit and inexperience of a new department, Private Wealth Management Department have brought more opportunities for individuals in investment, and soon to be a prospective department in the company The report is an introduction to the overview of the characteristics, functions, organization and personnel of Private Wealth Management Department of BSC, and also describes the actual work process in the daily working environment of securities companies and responsibilities each staffs have to handle Since then reports provide notes on office skills, communication skills needed in the work, and also brings a realistic picture of the theoretical basis in finance and banking industries, so that students can combine flexibly between knowledge and practice Although five weeks internship in BSC is not a long time, but I also was able to accumulate a lot of experiences and knowledge, new skills in real practice, especially communication skills and the behavior when working in an organization, which will be helpful for me later on when I graduate from Foreign Trade University 17 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com REFERENCES BSC’s annual report in 2015 BSC Overview (2016) [online] BSC website Available at: https://www.bsc.com.vn/CorporateInformation.aspx [Accessed August 8th 2016] BSC Market News (2016) BSC dự kiến nới room 49%, tăng vốn lên 1.500 tỷ đồng năm 2016 [online] BSC website Available at: https://www.bsc.com.vn/News/2016/4/5/500099.aspx [Accessed August 8th 2016] 18 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... General information about Private Wealth Management Department 1.2.1 Functions of Private Wealth Management Department 1.2.2 Obligation of Private Wealth Management Department staffs Internship... 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 incorporates... time internship in BSC, along with applying knowledge acquiring through the learning time at FTU, I had chosen the topic: ? ?Organizational situation of Private Wealth Management Department in BIDV