A securities firm in Shenzhen. (File photo/Xinhua)
Securities firms in China have been trying to lure representatives of fund companies with beauty treatments, envelopes containing cash — sometimes as much as 10,000 yuan (US$1,600), parties and tourism junkets, undermining the rigorous research-based approach previously followed by the investment research sector.
The Chinese-language Securities Times had previously cited the example of an attractive saleswoman employed by a securities company in Shanghai, who was asked to deliver breakfast to the manager of a fund company. Delivering fruit or snacks has become a key part of the job profile of saleswomen in Shenzhen, a sales representative working with a listed securities company in the southern city said.
The website of Securities Times further said that it is common for executives at fund companies in Guangzhou and Shenzhen to receive baskets of fruit with greetings cards.
The staid lifestyles of most investment research professionals working at fund companies has also created an opportunity for securities firms to offer such services. Securities firms also regularly organized movie screenings or golfing sessions for fund executives after the market closed on Fridays.
In one instance, the research team of a Shanghai securities firm was accompanied by a bevy of six attractive women during a presentation for an investment supervisor. Some securities firms have also recruited women from art and aviation schools as salespersons.
A recent recruitment ad placed by a securities firm in Shenzhen also spelled out clearly that it was looking to recruit attractive and "open-minded" women as sales representatives.
Managers and researchers received the maximum number of gifts between late August and late September, as this was usually the time they evaluated companies.
"During these two months, each of them would receive more than 20,000 yuan (US$3,170) in cash and vouchers, in addition to some luxury gifts, such as watches," a researcher employed with a fund firm said.
"We decide what services to offer based on the commissions brought by the fund firms to securities companies," a salesman at a listed securities company told the newspaper.
Sending fund managers on trips abroad was another service offered by securities firms, with Asia, Europe and North America being the most popular tourism destinations, the report stated.
Holding various theme parties was another way in which securities firms marketed themselves, the report added.