I have a lunch appointment with an ex-dealer yesterday. It is great to chat with these people who are inside the 'trading' industry. They could give me many insight of the operations and such. Well, I gathered many things from a short 1-hour chat.
There is a difference between 'dealers' and 'remisiers'.
Dealers : Normally, young graduates ... after completing their module 6&7 with SIDC, they will becoming IB's dealers. They are employed, with fix salary and commissions. Bonus and such depends on their performance. If they could get more clients to open trading account under them, and each time the clients trade, the IBank will earn some trading fees. The dealer's performance depending on the amount of fees changed from the clients trades.
Remisiers : Similar manner, just that they are partners of IBanks, which they have a deal of profit sharing (normally 50-50) of the trading fees charged. As remisier, it is their 'rice bowl' Their clients need to trade in order for them to be paid. They are not employed by the bank. Many dealers will eventually like to be remisiers, as one is moving from E to S quadrant. Self-employed ... if you have a large client-base, you could earn well.
So ... I will never be a dealer ... I have no intention to be remisier. I dislike the 'looking for client'(sales and marketing) and I dislike filling in forms, photostating, updating etc etc(paperwork). But, I do think I will sit for the module 6&7 ... for knowledge purposes.
I still feel remisiers should do their homework before they ask their clients to buy-sell. Some remisiers want to earn that commission will simply ask their clients to buy ... on tips. There are some more responsible remisiers. Most clients wish to be given 'tips' to trade.
Do not blame your dealers or remisiers if you done a bad trade. No one could tell when markets will turn ... and we should trade at our own risk.
I still remember my first dealer from OSK(KK). He is a young guy ... and as I was a total newbie, I see him as 'sifu' ... a person who should know in-out of stock-markets. Hmm ... that view has changed totally(haha). Yeah ... I was naive. The first broker report I read was RanHill. With target price RM4.20(I think) and it was trading at RM2.30, it is a buy, right? That is how we newbies buying stocks!! But, I consulted my dealer ... and he gave me a thumping YES. It is a must buy ... well, JAN 2008 ... what are we expecting when KLCI at new high?
Note : Ranhill was taken private at 90cents some time ago. Then, they were seeking to be re-listed but rejected by Bursa(long story, cut short). Well, RTO on Symphony .. Symphony gapped up to 25cents from 15cents(many of us bought at this level).
Most dealers are young and not so experienced in stock-markets. Newbies should not take their words as 'everything' ... and should do own homework. Ask those experienced ones. Many will help.
There are many experienced remisiers ... many responsible ones. We can always opt to change our remisiers or trading account(s) if the current one is not giving good service. I do know few good remisiers ... but I wish to maintain 'neutral' rather than promoting any remisiers. I am glad with my remisiers(I have two).
I do not mind meeting up with remisiers during my off-peak period(Nov-Dec). Do keep in touch, dont worry ... I am not remisier's competitor ... in fact, we could be 'partners' and see how we could help each other by helping your clients?
Good trading day ahead.