Direct Access and Standard Products Department
The number of brokers operating on the Russian capital market has reached a critical point and shifted the balance between demand and supply to the supply side. As a result of this process, the equilibrium price for brokerage services has migrated to a lower level. In such a market environment, the importance of customer service and products quality is crucial. Our company has consistently attached great attention to both of these issues in all its operations on the equity market. The year 2001 was no exception: we continued to position ourselves as a client-driven company. New trends have been established based not only on quality considerations but also on quantitative assessments leading to development and implementation of new projects and a broadening spectrum of available services. A number of processes fully developed during 2001 got under way in 2000, at which time the strategic decision to reorganize our business from a mere brokerage into a full scale financial institution was made. By adhering to our strategic goal, we have managed to become not just a conglomerate of corporate entities, but also a brokerage house involved in numerous areas of business.
Despite this explosive growth, our core business commitment remains brokerage services, which witnessed dramatic quality improvement over the past year. Internet trading has also reached new heights. The launch of Transaq software has given us a powerful edge over other brokerages on the Russian equity market. Customers now have the option to engage in real-time e-trading. Giant steps have been taken to ensure seamless Internet trading operations, ranging from the launch of backup servers to troubleshooting by the Help Desk and IT technical support staff. The net result of our efforts was been a 2.5-fold rise in Internet trading last year. The snowballing customer service trend is visible not just in e-trading, but also in all major divisions of the company.
This is not to say that our customers displayed lackluster interest in the Russian stock market in earlier periods. But most people were not quite ready to commit their funds into equity options. That is why Financial Analyst realized the need to roll out an effective client training program. A corporate training center is now up and running with two major projects available. The first one features classroom workshops combined with practical courses taught by our leading specialists. This project even has outreach in the regions, where our experts have delivered a number of successful training seminars. The second project involves long-distance learning and features Internet and an e-access payment system, thereby saving clients an immense amount of time and money.
Custodial operations are an additional service which has become popular among clients after we received a depository license. This solution also provides Finam with a strong competitive edge.
A few words should also be said about regional expansion, since amazing results have been achieved in this area over the past year. Extensive geographical outreach has been the by-product of excellent customer service relations in combination with brokerage services. As a result of this focused policy, by the end of 2001 our network of regional rep offices soared from 6 to 33.
Front Office
Financial Analyst has evolved into a 1-stop investment service provider which is positioned to offer its customers premium market solutions using cutting-edge technology. The company’s motto is just to do what it takes for every single customer. Our versatile staff members are geared towards delivering maximum value to existing and new clients, whether individual or corporate.
We offer all professional stock market players the opportunity to serve their customer service needs on leading capital markets using Quik and Transaq software. Pros can become Financial Analyst’s customers by signing a contract and providing their own clients with direct access to e-trading resources.
Professional account managers and those who feel comfortable managing friends’ money also have the option to open multiple accounts manageable from a single terminal with separate itemized statements on all transactions performed.
Upon request, any client is entitled, at a modest fee, to obtain a private work station on the trading floor with access to the Internet, fresh market data and key trading resources. This way a customer can monitor developments right from the trading floor, using all available information resources and placing orders with our traders. Our friendly experts are always on hand to answer your questions as and when they arise. Versatile tariff plans allow traders to optimize their commission expenditure.
If a customer would like to trade on his/her own, this can be easily arranged through our Quik and Transaq e-trading systems. A minimum investment fee makes access to the Russian equity market extremely simple. A client can try out his/her trading skills by executing a small and relatively risk-free transaction. A whole range of flexible tariff options enables traders to minimize their commission fees.
In summary, the year 2001 witnessed quantum leaps in the quality and speed of key services, with our FO team posting robust gains both numerically and professionally. Professional growth of our staff is one of our top priorities. They can all process standard transactions at mind-boggling speed and bull’s-eye precision. One of the pillars of our success is the ability to create a warm and friendly working environment for every one of our clients.
Middle office
The traditional function of a middle office of an investment company is to perform brokerage and dealer transactions involving equities both on exchanges and the over-the-counter market. Financial Analyst’s traders operate on all major market venues: RTS, MICEX, as well as the Moscow and St. Petersburg stock exchanges.
The department’s staff takes pride in ensuring high quality and rapid execution of customer orders against against the backdrop of rising transaction volume on all major market segments. Customer satisfaction is invariably uppermost in their minds.
In 2001 the department continued its quality enhancement efforts. A risk management program was worked out which has been running flawlessly, thanks to our specialists. We have truly gone the extra mile to enable our customers to make money both on bull and bear markets.
Regional Business Development Department
Since 2000 the company has been offering equity brokerage services to our clients in a number of Russian cities. Given increased interest in the investment process in the regions, it has become necessary to open local offices to liaise between the company and its regional clients. This important task has been assigned to our commercial representatives.
The department deals with staff training, office spin-off and organization of educational programs in regions. Customer service and financial reporting are duties of regional offices as well. We try to maintain the same high level of service quality across our organization and expect the same professionalism in the regions as in Moscow to preserve our business reputation.
We have partnered with representatives in 34 cities in Russia, 32 of them already have opened offices and serve their local clients. Client activity in regions has surged 2.5-fold over the last year while the number of clients has grown 2.5 - 3 fold during the same period of time. Our main regions of expansion are the Southern, Volga and Ural federal regions. Our most promising regional offices are located in Krasnodar, Tyumen, Togliatti, Irkutsk, Stovropol, Ekaterinburg and Nizhny Novgorod.
Help Desk and Technical Support Department
The company’s rapid expansion and deployment of highly sophisticated software have led to the creation of a Help Desk group to support our clients in every facet of their business endeavors. Today the department ensures flawless functioning of information and trading systems thus ensuring premium quality level. The main goal of the department is deliver maximum system reliability and continue the roll-out of new software products for the ease and convenience of our customers.
Department of Individual Customer Solutions
In 2001 Finam became aware of the need for a separate department to handle our VIP clients. The department was therefore set up to provide high quality services to big clients and lift our market share on that segment of the market.
A traditional priority of the department is consulting and asset management. Another promising area is corporate finance, investment project assessment and M&A consulting. We are not a product-driven but rather a customer-driven company. In line with this core concept, we create new services to match our clients’ needs applying high-quality standards to all activities. The department’s specialists are ready and willing to solve all your problems and address all of your inquiries.
The best gauge of our effectiveness is the constant growth of customer base and aggregate cash flow. Clients served by this department are ready for the long haul and enjoy doing business with us.
Next year we are planning to focus on enhancing business processes in the department and setting in place a well-oiled sales mechanism for investment ideas and services. The time has come to identify and craft financial consulting, business assessment and M&A services. We have many interesting projects under way in these crucial areas. Now that quality concerns have become our top priority we continue to propagate our status as a customer-driven company. The Department of Individual Customer Solutions has been charged with the task of proving our commitment to this tenet in day-to-day operations.
Sales Department
The Sales Department holds a frontrunner’s position in the company by conducting market research, identifying potential customer groups and estimating their needs to find the most suitable approach for each specific group. The department has been up and running since 2000 and has by now achieved a clear vision of its goals, as well as the ways and means to achieve them. We have formed contacts with several large companies and conducted numerous seminars for Gazprom and Norilsk Nickel. Based on the feedback from those companies, we can say that many Russian companies are very interested in our kind of services and by sticking to this approach we are bound to see excellent results.
- Department’s main goal – new client development
- Provide information about equity market opportunities
- Investment ideas allow clients to react on a timely basis to changes on the market
- Another important function is to customize standard products to individual client’s requirements.
- Provide a broad array of services
- Provide VIP brokerage services
- The Sales Department has its own training center where investors can learn about investment practices and culture. In association with the Academy of National Economy a course on asset management has been created for MBA program. Last year, around 500 students took the class.
Asset Management and Consulting Department
At present a growing number of clients has taken an interest not only in standard brokerage services, but also in consulting and fiduciary asset management services.
Financial Analyst was one of the first investment companies on the Russian equity market to offer its clients consulting and asset management services in order to meet VIP client needs.
By committing their funds to the stock market, investors aspire not only to protect their funds against inflation, but also generate a profit. Equity trading is a rather risky type of investment and to be successful one needs expertise and know how such as that held by Financial Analyst’s asset managers.
All experts have extensive experience in managing large amounts of clients’ money, investing in corporate equities, bonds, options and futures, working with arbitrage schemes and hedging. Taking an individual approach allows us to find just the right investment strategy for every client depending on his risk tolerance and return expectations.
We believe that consulting and asset management is one of the most lucrative segments of the Russian stock market.
Finance Department
The Finance Department was set up in 2001 and incorporated the back office, accounting, depository and internal audit departments in order to achieve a better reporting system and more efficient staff utilization.
The accounting office is a separate team that consolidates client financial statements and income tax administration. Unfortunately, the reason for such a structure is the constantly shifting nature of laws and regulations. Every client needs personal assistance in calculating his/her income tax. Many clients request income tax advisory.
Another separate entity within the department is Internal Audit. It is vital for a company with large number of stock exchange transactions and automatic information uploads. Internal audit pinpoints errors in current reports and strives to rectify procedural issues on a fast-track basis.
Accounting Department
Dealing with accounting reports at an investment company requires extensive experience and a profound understanding of the subject matter. Accounting professionals constantly attend conferences and seminars organized by NAUFOR and FSC. Permanent monitoring of statutory tax amendments and reporting requirements, as well as adopting new operating methods enable our accountants to stay abreast of all new developments. A broad range of tax advisory solutions is offered to customers and tax seminars are held for the benefit of investors at the company’s training center.
Depository
A depository in an investment company ensures simplicity and precision in executing key transactions.
In line with our strategy to lift the range of brokerage services, in 2001 Financial Analyst received FSC License ¹ 177-05317-000100 to perform depository operations in conjunction with brokerage and dealer activities on the Russian stock market. As of January 31, 2001 there were 1,382 Depo accounts and four nominal holder accounts.
Alongside this, the number of stock issuers which have placed their equities in our depository had risen to 135 by January 31 2001.
Technology and software enhancements made last year minimized the possibility of unsanctioned access or malfunction.
The following strategic targets have been attained:
- Low cost of depository services, flexible discount system
- Less paperwork
- Shorter servicing timeframe
- Standardized reporting pro-formas
- Free information and consulting services
Back Office
The Back office is an core component of Financial Analyst and has been operational since the inception of the company. Executing and documenting client transactions and customer portfolio reports are essential functions of the company. Everything is done in strict compliance with NAUFOR and FSC regulations. The Back Office generates statistics needed for all kinds of analysis as well as for planning and budgeting.
Back Office employees are committed to the highest customer service standards. A special Internal Audit program has been tailor-made to fit NAUFOR and FSC requirements.
Crafting an individual approach to each client without disrupting the operational integrity in the environment of large transactions is the touchstone principle of Finam’s Back Office.
Business Development Department
The Business Development Department was set up in 2001 to roll out market strategy and map out ways to expand business opportunities. Within this framework the department is planning to develop electronic network and platforms based on innovative solutions in investment technology. Business Development is also on the lookout for new services to draw new client categories into our practice. The top priority for the department is to enter new markets and pursue productive partnerships with stock market players.
Research Department
Every year the number of Financial Analyst’s industry shareholder clients continues to grow by leaps and bounds. Their prime concern is getting a well-informed and straight answer to one question: What will be a price of a share in a month, a year, etc.? These industry watchers frequently need to be advised on whether to sell or hold their shares, if a share has upside potential, or how to diversify their portfolio. The analytical approach advocated by our company provides an answer to these questions, but on one condition: that equities be tradable like those of UES and Lukoil, and these options are few and far between on the Russian stock market. But what about so-called second-tier stocks, which have just starting to make their appearance on the market? Ownership redistribution in entire industries has also impacted and complicated the stock market. Given this state of affairs, the primary objectives of Finam’s Research Department are as follows:
- Frame investment recommendations for our clients
- Provide clients with timely information and feedback on market-making events
- Address customer queries online
- Provide departments working directly with clients with analytical materials covering companies and industries
- Post our commentaries and Russian equity research on media resources, including our website at www.Finam.ru
HR Department
A team of professional managers thoroughly devoted to what they do and always seeking for better ways to advance the company is a vital prerequisite for the company’s well-being and financial success. We strive to arrange our operations in a goal-oriented way and constantly fine-tune it using performance matrices.
As of today, the main responsibilities of HR department are: first of all, to create the proper work atmosphere for our employees, where everybody is involved in the decision-making process, thus allowing the company to be flexible and keep pace with a rapidly changing business environment, operating proactively to stay one stride ahead of the market. Secondly, we try to provide everyone in our organization with advancement opportunities, professional growth, self-fulfillment in terms of creativity and personal input.
We hire and train only the most qualified and experienced candidates with extensive creative skills, i.e. individuals with a strong sense of personal motivation capable of taking on onerous responsibility. We attach special value to employees who are geared primarily towards shooting for corporate goals and upholding the image of Financial Analyst and only then thinking of their own advancement. We also promote bottom-up communication by encouraging staff to make suggestions on how to optimize operations within a team, department or company as a whole.
We take pride in knowing that our clients trust us. To earn and maintain this trust our staff is committed to enhancing corporate culture, healthy psychological work environment and interpersonal communications with clients and colleagues alike, thereby upholding our image and reputation.
Legal Department
The Legal Department is another business unit of Financial Analyst. The chief responsibilities of the department are: to protect the company’s rights and interests when dealing with federal authorities, municipal authorities, clients, shareholders and employees; to use legal ways and means to safeguard and grow the company’s property, to support and develop the legal culture as one of the key facets of corporate culture.
The Legal Department is tasked with the following functions:
- In the area of internal documentation:
- develop internal memoranda
- draft expert legal reports on memos by management, shareholders or other relevant parties
- ensure that all internal documents are legally compliant
- keep incorporation documents and other important documents in order
In the area of contracts:
- interact with other departments in drafting documents and conducting expert legal reports in keeping with Russian legal procedures
- produce documents required to finalize and execute agreements
- keep all agreements in proper order
In the area of court litigation:
- draft documents required for court proceedings
- act as the company’s legal representative in courts of law
In the area of employment relations:
- provide assistance in drafting employment contracts
- offer legal support on employment issues for management and personnel
- assist staff on legal issues
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