The wolf-like remarks of the chief brokerage company went out of the circle: analysts are also involved in rushing to distribute points, can small and medium-sized brokerages still counterattack

  After working overtime during the Spring Festival and providing food delivery services to buyers during the epidemic, securities practitioners became “rolled up” during the Qingming Festival holiday. The chief analyst of a securities firm’s fixed income “lectures” chat records of internal employees circulated wildly on the Internet.

  "Everyone must crush XX for me" "If the workload cannot exceed XX, be prepared to be fired"... Every sentence in the chat log is wolfish.

Among them, "The goal of each of you in the future is to get 1% of the distribution points in a single season, and I will get more than 5% of the distribution points in a single season" is the finishing touch.

  Behind this sentence, there are many questions: what is the point distribution mechanism?

How much is the commission income for split positions?

What pressures are sell-side institutions facing?

How to improve the efficiency of investment research services?

  What is a pie point?

  The meeting point of the relationship between the buyer and the seller represented by the fund and the brokerage

  In the entire chat record of the chief analyst, the word "points" has been mentioned many times, for example, "the goal of each of you in the future is to get 1% of points in a single season, and I will get 5% of points in a single season. Above, so that 5%+1%×6=11%, almost our group can rank first in the whole research institute group.”

  What exactly is a pie point?

A reporter from Shell Finance learned that in the financial market, brokerage research institutes provide investment and research services as sellers, while fund companies and other buy-side institutions give brokerages points for distribution and settlement after enjoying the service, which is the so-called distribution commission.

The brokerage’s commission for sub-positions can be roughly equivalent to the operating income of the research institute, and changes in the commissions for sub-positions affect the nerves of both parties.

  "Our buyer is a fund company, and we generate commissions for investors to buy and sell stocks, especially for leading public funds, which will cause a problem, which brokerage will this commission go to and how it will be distributed. So there is a point distribution mechanism." Some public fund practitioners told Shell Finance reporters.

  "Each fund manager has 100 points, which are allocated to the sell-side analysts who serve him. Whoever gets the most will represent who will do well." A brokerage insider told Shell Finance reporters that "points" represent the analyst's client commission. As a percentage of the Institute's total commissions.

  "But the sell-side institutions are facing more and more noise, and they need a lot of service and organizational work to attract more attention and gain more recognition from external customers." He used to be an analyst at China Merchants Securities Research and Development Center and chief analyst at the research department of CITIC Securities. (MD), Director of Everbright Securities Research Institute, Assistant General Manager and Managing Director of Shanghai Orient Securities Asset Management Co., Ltd., who has transformed from a sell-side analyst to buy-side research, once said that the sell-side institution is not easy.

  This is why the fixed income chief mentioned in the chat record: no matter what means, special roadshows, meals, accompaniment, research, databases, etc., each of you is a small team, with interns, rushing forward... …Don’t be afraid of serving others, don’t be afraid of losing face, I even changed my WeChat signature to “Please send some support.”

  According to his description, the market competition faced by sell-side researchers is very fierce. A fund manager dispatches points every quarter, facing thousands of sell-side researchers in the whole market. want……"

  The above-mentioned securities business insiders said that this may be related to the development of Guotai Junan Research Institute in recent years, and the fixed income chief may have been under too much pressure in the past six months.

  Then, what is the requirement for the KPI of "1% of team members in a single season, and 11% of the team"? A brokerage practitioner told Shell Finance reporters that it is difficult to complete this KPI.

  According to the calculation of the sub-position commission, the top 20 securities companies in the sub-position commission in 2021 will have an average of about 500 million yuan. On average, it means that the chief will contribute 5% of the research institute’s revenue (about 25 million yuan). ), and its team of 7 people will contribute 11% of the total revenue (about 55 million yuan).

  How much is the commission income for split positions?

  In 2021, financial institutions will collect 22.2 billion yuan, with CITIC Securities ranking first

  Along with the release of the annual report, the brokerage commission data for separate positions has also been released.

Overall, in 2021, more than 300 financial institutions will receive more than 22.2 billion yuan in commissions for fund segregation.

Among them, the top 20 securities companies collected nearly 15.9 billion yuan, accounting for more than 70%.

  Specifically, the commissions of the 4 brokerages' fund sub-positions exceeded 1 billion yuan, and the commission seats accounted for 22%.

CITIC Securities ranked first with 1.667 billion yuan in commission income from fund split positions, a year-on-year increase of 61.37%; Changjiang Securities (1.181 billion yuan), GF Securities (1.155 billion yuan) and China Securities (1.026 billion yuan) followed closely. The average growth rate of the three securities firms exceeded 60%.

  Judging from the ranking of fund sub-position commissions, among the top ten, GF Securities and CITIC Construction Investment have swapped positions, advancing one place to third; Haitong Securities jumped from tenth to sixth place, and Industrial Securities and Shenwan Hongyuan each advanced. One, occupying the seventh and eighth places; Zhongtai Securities and Guotai Junan each dropped three places, ranking ninth and tenth.

  In 2021, nearly 30 securities firms will achieve a year-on-year increase of more than 100% in commission income from fund segregation. It is worth noting that most of these brokerages are small and medium-sized securities firms. Among them, Debon Securities realized a commission income of 69 million yuan for fund segregation, a year-on-year increase of 911.27%. %; Wanhe Securities, Jinyuan Securities, and Kaiyuan Securities followed closely, with a year-on-year increase of more than 300% in commission income from fund separation.

  Is the institute operating at a loss?

  The counterattack of the small and medium-sized brokerage research institute is getting more and more difficult

  Some insiders pointed out that many securities brokerage research institutes are operating at a loss, and there are constant disputes about the transformation and development of research institutes.

  Wang Jianhui, a senior person in the securities industry, said in an interview with Shell Finance reporter that on the one hand, the securities research institute itself is a cost center, and personnel costs, database purchases, and office travel expenses are all hard expenses and rising.

On the other hand, the output of the research is not easy to quantify the productivity, mainly to get the seller's point income, but the income is not particularly stable, and it may not be able to fully match the relevant input.

  As for the value of analysts, he believes that the value created by analysts should be measured in many aspects. For example, the communication between analysts and customers may be more effective. Although the buy-side institution does not use research reports, it absorbs the ideas proposed by analysts. Reported performance is difficult to link, but it does generate value, and at the same time, analysts also have a brand role.

  Previously, the counterattack of Tianfeng Securities Brokerage Research Institute caused the industry to think.

It is understood that when Tianfeng Securities was sprinting for the IPO, it made efforts in the research field, established a research institute and attracted many well-known analysts to join. Then, in just a few years, Tianfeng Securities Research Institute rose and became a counter-attack of the research institute of small and medium-sized securities companies. typical case.

  How likely is it that securities companies rely on the Institute to counterattack?

Wang Jianhui said that it may be a superficial phenomenon that the so-called securities companies improve the strength of the entire institution through research institutes.

In his view, the promotion of the research institute is relatively easy. As long as shareholders are willing to pay high prices to hire top talents, the reputation of the research institute will be significantly improved in a short period of time.

The improvement of the performance of the entire organization may require more investment in other aspects.

  "The research institute is just a starting point, a long-term plan, not a quick success." Wang Jianhui emphasized.

  He also pointed out that for small and medium-sized institutes looking to move from in-house services to sell-side institutions, the road ahead may be increasingly difficult.

Because the seller's market cake may be difficult to grow in the short term, it will become increasingly difficult to slice the existing cake.

So transitioning to a sell-side requires a better entry point.

  How to improve the efficiency of investment research services?

  There are public funds researching solutions

  It is understood that with the gradual advancement and practice of the digital transformation of the capital market in various business lines, the service problems and pain points between institutions in the field of asset management, investment and research are gradually exposed, that is, the efficiency problem between fund companies and securities brokerage research institutes.

  On the one hand, brokers need to send one-to-N repeatedly, the service efficiency is not high, the service process cannot be well recorded, and it is difficult for fund companies to give feedback in time;

  On the other hand, too many brokerage services have problems such as system fragmentation, information explosion, lack of data standards, and related data copyright protection needs to be further clarified.

  In order to improve the efficiency of investment and research services, public fund institutions have conducted research on this and are trying. Shell Finance reporter learned that the project is still in the planning and implementation of the first phase of the plan, but the process is not so smooth, among which the data Security and privacy protection issues are highly debated.

  Beijing News Shell Finance reporter Hu Meng