WITH THE HANG Seng Index once again riding the crest of a wave and international funds flowing into Hong Kong, Ben Kwong has good reason to feel optimistic. As chief operating officer for KGI Asia, one of the largest local brokerages, he is looking forward to a profitable year and plans to boost headcount at the 300-strong firm by hiring up to 100 staff. 'The target is to be a one-stop financial solutions provider,' Mr Kwong said. 'We have, therefore, responded to the increasing competition from overseas brokerages and banks by diversifying into other financial products including derivatives, options and warrants.' Realising that the local market for trading in equities is relatively mature, the firm has expanded into distributing structured products and funds managed by prominent global players. With the support of sister companies in Taiwan, Korea, Thailand and the mainland, KGI Asia has also diversified geographically to offer investment opportunities across the region. 'It has been possible to leverage our client base locally and establish a cross-selling platform which creates a lot of advantages,' Mr Kwong said. 'This allows us to serve their needs effectively and to increase revenue.' He added that initial public offering (IPO) activities this year were likely to be buoyant. Some 'big China plays' such as the Industrial and Commercial Bank of China, and the Bank of China were expected to seek listings in the coming months and would generate significant business. 'I believe we will continue to enjoy good volumes and a strong market,' Mr Kwong said. 'The potential revaluation of the renminbi will keep interest high in China shares and red-chips, and should lead to extra speculative trading.' KGI now has about 40,000 clients and is looking to the mainland to increase this customer base. A potential problem, in view of the country's foreign exchange restrictions, is the transfer of funds. But provided that people from the mainland can arrange their finances to settle in Hong Kong, they should be able to trade without any restrictions. One option open to them is the firm's electronic trading facility introduced in 2000 in response to increasing demand for online services. It accounts for about 25 per cent of the turnover in terms of volume. Regularly updated, the system enables clients to trade in Hong Kong stocks and futures, in addition to certain overseas products. Despite this, Mr Kwong does not expect the proportion of business done online to grow significantly. He said most retail investors still preferred to talk to their brokers for information and advice. KGI Asia, therefore, laid emphasis on product training and service quality. 'Our niche is to know clients better than banks, and to provide a better service in terms of market knowledge and personalised attention,' Mr Kwong said. This philosophy will guide the recruitment process as the company looks to fill a range of frontline, back-office and management roles in the coming months. 'It can be quite difficult to find people with the right qualifications,' Mr Kwong said. 'To attract them, you must be able to present the strengths of your company convincingly and realise that, in this industry, people are very practical when it comes to remuneration.' Candidates for the positions of brokers and sales managers need the necessary Securities and Futures Commission licences, good communication skills and relevant experience. Fresh graduates are generally more suited to customer service roles such as handling corporate clients, where they can learn the business. Once established, a broker may specialise in one market or a particular product. The usual route is to start with Hong Kong equities before branching out. The steps subsequently taken depend on individual preference, profits generated and a person's professional background. 'Some are naturally inclined to move into more sophisticated products, while others just stick to trading stocks,' Mr Kwong said. Whatever the case, KGI Asia provides the necessary training and support. It also allows frontline salespeople certain leeway in deciding what they are best able to sell. For a broker, each working day begins with a briefing from the in-house research team. This covers market news, international economic factors and specific share recommendations, which help to monitor client portfolios, and provide up-to-the-minute tips and advice. Regular duties include executing trades, checking credit balances and keeping track of settlements. 'It is especially important to make sure clients are not overexposed on credit risk and that trading errors are avoided,' Mr Kwong said. The number of clients per broker varies greatly, as does the attention each needs. Much depends on the state of the market, and whether a person's trading strategy is to look for short-term gains or to invest for the long term. KGI Asia judges sales performance on a number of criteria. The first is commission earned on a daily basis, which largely determines personal income and the level of monthly bonuses. The firm also regularly assesses competence in handling clients and the overall activity in terms of generating new business. Generally, this is done through referrals, social events and networking. 'Basically, brokers must find new clients through their own efforts,' Mr Kwong said. 'We expect them to socialise after hours and, because of that, our office hours are not very strict.' His usual advice to people planning to get into the business is to maintain equanimity whether the market is up or down. 'There is pressure in the job from client demands, meeting quotas, and making money for yourself and the company,' he said. 'Your life will be easier, though, if you accept that there will be some bad times along with the good.'