Stockbroker Yuppies Bite the Bullet

With share values plummeting on the local stock exchange, the standing of Taiwan's stock brokerage personnel has also taken a dive.

"The difference is obvious the moment you swop name-cards," sighs securities analyst Eiki Kiu of Taiwan Security Company. At one time, as soon as you produced your namecard people would be impressed, take you into their confidence and make a big effort to strike up a relationship in case they should "require your services" one day; but now, one look at your name-card and embarrassment is written all over their face.

"Is he sympathizing with me for being in this line of business? Or is it that he's sitting on a pile of worthless shares?" So Eiki Kiu now avoids showing his name-card to strangers as far as possible.

It used to be said that "men always hate finding they've chosen the wrong career," but Wu Hsin-hui of Nan Shan Life Insurance is a woman who changed course in good time.

Until this March, 25-year-old Wu Hsin-hui was deputy head of the settlements department at National Securities with a salary of NT$100,000 per month. When she tendered her resignation in February neither her mother nor her boss could believe it, they thought she must be crazy. "My mother was furious, she scolded me day in day out, along with my boss."

The dry and uninspiring nature of settlement work was already making Wu Hsin-hui feel the strain, but with no prospect of high pay and managerial status elsewhere it was left to an acquaintance from school days to prod her into really thinking about her future.

He'd got in touch about selling some life insurance, but Wu Hsin-hui was amazed to discover that from being a bashful lad at school, her friend had blossomed into a highly professional and persuasive insurance salesman.

"Without the comparison, I had no way of knowing how little I'd progressed myself." Wu Hsin-hui thought anxiously: "I've fallen behind already, so what will become of me in a few years time?"

She began pondering her future as share prices rose to record peaks, although some analysts were already predicting a market down-turn in the year ahead. "I took note and realized I had to get out in good time, otherwise I'd be regarded as letting the firm down."

Not to put too fine a point on it, she was concerned about the wide disparity in pay. But the manager at Nan Shan Life Insurance stumped her with a single question: "How guaranteed is your present salary? Why don't you go for something you have a firmer grip on?"

"I knew I didn't deserve such a high salary; I simply didn't dare mention it," Wu smiles with embarrassment. Settlement work mostly involves receiving sums of money, and a senior or even junior high school education is sufficient. But with her diploma in business management from National Central University she was promoted to manager after three months with the firm and found herself earning NT$30,000 more than her colleagues in the department.

"My present salary reflects the work I put into the job." Wu reveals her current salary varies between NT$20,000 and NT$50,000 and "I feel this is more valid."

Incredibly, Wu Hsin-hui's present salary is actually higher than that of her former colleagues in the brokerage. Since stock transactions have shrunk from NT$200 billion a day to the NT$10 billion mark, dealers' handling charges have become insufficient even to maintain their operations, and many employees now face redundancy. With compulsory lay-offs looming, they are lucky to be able to earn as little as NT$10,000 or NT$20,000 a month.

"With NT$12,000 a month in Taipei, half would go on renting a room and you couldn't live on the rest." Lu May-tzu, brokerage department assistant manager at Golden Harvest Securities, contemplates her colleagues' plight with a sense of helplessness. "Morale is low in many firms, and if people can't take the heat either psychologically or financially, they will just quit."

Money magazine publisher Patrick Sun points out that a cut in salary is nothing; some people are saddled with massive debts which are bound to backfire on them sooner or later.

"When the stock market was booming people made overblown investments and committed their income for years ahead," Sun says.

These investments include shares and real estate. When times were good and the money was rolling in people bought houses for NT$10 million, and now find they can't pay the mortgage.

Even worse were those who borrowed money from relatives or colleagues to trade in shares, even illegally "borrowing" clients' shares to sell.

"When business was booming sales were made so fast you could divert a client's shares for a while without anyone knowing. Now that share values are falling, the pigeons are coming home to roost." Wu Hsin-hui pain-fully acknowledges she knows a friend who's lost NT$40 million already.

"He's only just 30! I urged him to come clean, go to jail for a while and make a fresh start, otherwise who knows when the debt would be cleared?" Wu Hsin-hui shakes her head: "But he prefers to wait until share prices rebound and he has another chance to recoup his losses."

Failure to repay money borrowed from colleague and relatives is ruinous to personal relationships, and people have gone to ground to avoid their debts. Those with more savvy have managed to shift their own losses onto their firm, while others have been lucky in that their firm has accepted responsibility for their own debt--securities firms are keen to maintain an immaculate record to qualify under the Ministry of Finance's recent arrangements for the financial investment and securities industry. But such people have signed their life away, and are working to pay off their debt.

People whose case is less complex and who have made a clean break are discovering that other industries do not welcome them.

Recently a number of prominent industrialists and businessmen have openly expressed their unwillingness to employ people from securities firms. Many more managers are quietly following their lead. Job applicants are discovering that the CV's they send out are ignored, neither do they have the option of sitting for an examination.

Chang Pei-chi, manpower planning director at the Council for Economic Planning and Development, declines to attribute this phenomenon wholly to discrimination against securities firm employees; to some extent it has resulted from cost-cutting throughout industry due to the recent economic downturn.

Associate Professor Cheng Wei-yuan of National Taiwan University's department of sociology maintains that employees in this sector are the tops for work efficiency and service attitude.

But the issue is not so clear-cut. According to Formosa Plastics Group President Y.T. Wang, several former employees who left to go into the securities business over the past two years recently asked about returning. "I had no objection, but when it came up at our personnel meeting the workforce unanimously turned it down."

The main reason for turning them down was concern about their loyalty to the firm; and if we let certain people come and go as they please, what could we say to those who have loyally stayed at their posts? Besides, most of the people who chose to go into the securities industry bought shares themselves; after being used to earning a fat pile with a turn of the hand, how will they be content to settle down to work and live on a steady salary? And if the market revives, won't they just wave us goodbye and take off again?

Faced with this outside reaction, many securities employees are quite understanding.

"If I were in their shoes I would think just the same way," frankly admits K.M. Lin, senior vice president of Core Pacific Securities. He recently posted a newspaper advertisement calling for young people to "go back to work, this is not your battleground." If he were in another industry and two people with identical qualifications applied to him for a job, he would choose the one who had not worked in the securities industry because "he would have a different set of values."

Some people find this sudden turn-around unfair. "How come everyone acknowledged this was the right career for go-ahead people two years ago, yet now they make out only lazy, work-shy people would go in for it?" Paul Lin, an accountant before entering the securities industry, can hardly conceal his indignation.

In fact when the securities industry was opened up two and a half years ago a lot of young people working in banks and credit companies or recently graduated from university viewed it as Taiwan's most efficient financial market with the best potential for internationalization, and went in with high hopes. What they could not anticipate was how fast the industry would rise or how fast it would fall.

The youngsters feel their loss of prestige is undeserved, but those in their thirties and forties see things differently.

"You can't take your career lightly; you made a decision, so you have the responsibility," Frank Yeh, manager at National Securities, speaks with feeling. Each market participant has a certain responsibility for the turn the market has taken.

In the past, he points out, brokerage staff tended to take a short-term attitude in dealing with clients; to build up a high turnover they desperately encouraged clients to buy and sell. In fact they ought to be playing the role of investment advisers, helping their clients hedge risks and make profits in their own long-term interests. "To think long-term, you've really got to be up to scratch."

As far as share trading is concerned, Paul Lin thinks that with ever more stringent financial inspection of quoted companies by the Securities Control Commission, the securities industry will not be able to rely on pulling strings to win business. They ought instead to be in the business of assisting companies preparing to list shares on the stock exchange to improve their financial structure. Furthermore, securities dealers must be capable of assessing at what price to take up the shares of these publicly quoted companies and at what price to sell them, "more along the lines of investment banking."

Having seen the way the market is headed, and still confident this is the industry for them, some securities employees have made a bright move--they have applied for unpaid leave of absence and are using their earnings of the past two years to study overseas. By the time they've recharged their batteries, the market might well need their services again. According to Frank Yeh, seven or eight of his colleagues at National Securities alone have chosen the study option.

Meanwhile there is yet another type of employee in the business, those who have never traded shares or engaged in illicit deals; when the market flourished their salaries went up, and now that it has fallen they are staying faithfully at their posts for simple love of the work. Lu May-tzu is one typical example.

"I just regard myself as an office worker who is paid a regular salary to do a certain job," laughs Lu May-tzu, who often collected bumps and bruises rushing to complete clients' deals on time. Maybe she never traded shares because she's not bright enough to do two things at once; after all, if she'd been thinking about her own shares she might have made mistakes at the counter.

She admits her morale was affected by the industry downturn, but talking things over with teachers and friends helped her see the right course of action more clearly.

Now she does three hours' work in the morning, spends the afternoon visiting clients and doing public relations work, then in the evening attends a course for managerial staff of medium and small businesses, set up by National Chung Hsing University. Other people may take it easy when business is slack, but Lu May-tzu is as busy as ever.

"Attending evening course is a particularly beneficial process for me," Lu says with a smile. The discussions between teachers and students during class often take her back to her simpler student days. "I'm dealing day to day with speculators, which inevitably makes me more superficial in some ways. I need more contact with other people to bring me back to normal."

At 29 years old and happy to make progress at a steady pace, Lu May-tzu often tells herself: "Money is useful, but more important is to lay up wealth for the future."

After the ups and downs of recent years, more people now will surely agree she may have got it right.

[Picture Caption]

With the stock market in the doldrums, brokers scrape by on reduced salaries.

When the market was booming, going to work was like fighting a battle. Operators raked in the money, but paid a price. (photo from Sinorama files)

Since the stock market crash, appetizing lunch-boxes have become a thing of the past. (photo form Sinorama files)

Job-switchers are doubtful of a welcome in other industries.

A brokerage yuppie no longer, Wu Hsin-hui now works happily in insurance.

With the stock market in the doldrums, brokers scrape by on reduced salaries.

When the market was booming, going to work was like fighting a battle. Operators raked in the money, but paid a price. （photo from Sinorama files）

Since the stock market crash, appetizing lunch-boxes have become a thing of the past. （photo form Sinorama files）

Job-switchers are doubtful of a welcome in other industries.

A brokerage yuppie no longer, Wu Hsin-hui now works happily in insurance.