Providing Financial Products and Services, Helping Customers Make Transactions According to Their Requirements and Benefits.

When a customer suffers damage, it is very difficult to find fault and deal with the broker. Or there are cases where customers do not really understand the responsibilities and capabilities of the broker, so they have unreasonable expectations about what the broker can bring to them, and have complained when the reality is contrary to what they expected.

Brokers earn their living by commissions or spreads on the purchase or sale of financial interests. As such, their own financial interests may conflict with the needs and goals of their clients. As the client’s representative or proxy, the broker must always set aside this conflict so that the client’s best interests come first.

Brokerage firms can put a lot of pressure on their brokers to sell certain products or achieve certain total volumes. Such pressure can take many forms, from providing private offices to continuing to employ the same employee. The solution to such conflicts is generally simply to put the interests of the client first. Brokerage firms can also increase commissions to encourage brokers to make more transactions, and generally the higher the commission, and the more frequently it is generated, the better it is economically for the broker and also stimulates increased revenue for the firm. But brokerage firms or brokers must always act in the interests of the client, the client must be sold products that suit his or her individual needs, in appropriate volumes, and the sale must be made in a reasonable and honest manner on a mutually beneficial basis. And if representation is established in good faith and on a reasonable basis, then a fair client can hardly fault the broker or his brokerage firm if the recommendations they make do not always produce satisfactory results.

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In short, if financial advisors and their clients were more aware, they would act prudently and avoid disputes, or at least minimize the damage and costs of resolving disputes.

4. Functions of stock brokerage profession

As a professional activity in the interaction between the brokerage company - which provides physical, organizational and legal means, and the sales staff - who directly market and trade with customers, the stock brokerage profession has the following two main functions: 12

4.1 Provide information and advice to customers

Securities brokerage firms, through their sales staff, provide their clients with research reports and investment recommendations. This research is conducted through the research department within the securities firm, which studies key areas such as: the overall market performance, the performance of individual sectors within that market, or the performance of individual companies in the sector. Researchers provide this information to brokers on a weekly basis, along with specific recommendations on each type of security to buy and sell. Brokers will use this information to provide their clients with specific requests.

Brokers have daily access to an electronic information network that provides continuous and updated financial information on interest rates, economics, market news, and also have access to all the latest news from around the world related to their clients' stocks.

Thanks to this carefully collected and processed information, the broker has enough knowledge to become the client's personal financial advisor. In addition to simply recommending securities and services to the client, the broker can also introduce to the client stocks and services.

12 Dr. Tran Thi Thai Ha, " Stock brokerage profession", (National Political Publishing House, Hanoi, 2001) p. 25

bonds, newly issued bonds, mutual fund certificates and other investment instruments, and more importantly, propose a way to combine individual securities in a whole (portfolio) to minimize risk and maximize profit.

Brokers tell investors when to buy and sell and also provide them with financial and economic information about the market. Brokers, when giving advice to their clients, will base their advice on factors such as price-earnings ratios, earnings and price forecasts, the general condition of the stock's industry group and the overall state of the market.

A broker is not only a person who gives financial recommendations to customers, but sometimes also a trusted friend who can listen to all questions related to the financial situation of the customer, and to the extent possible, provide appropriate solutions to help customers overcome difficulties. Therefore, finding a good and dedicated broker is the desire of any stock investor.

4.2 Provide financial products and services, helping customers make transactions according to their requirements and interests.

Brokers receive orders from clients and execute transactions for them. This process includes a series of tasks, from guiding clients to open accounts at the company, conducting transactions, confirming transactions, making payments and transferring transaction results to clients. Not only that, after the transaction has been executed, brokers must continue to take care of clients' accounts, continue to make recommendations and provide information, monitor to grasp changes in life and work that can lead to changes in the financial status and risk-taking attitude of clients, thereby proposing appropriate new solutions or strategies.

The brokerage company is the place to ensure the physical conditions - including location, system of machinery and equipment connected to the Exchange - human resources (staff), and legality so that this process can be carried out quickly, accurately and effectively; at the same time, when disputes arise, they can be handled satisfactorily. To perform this function, the company is organized into appropriate functional departments, with strict and scientific operating procedures.

5. The role of stockbroking

5.1 Product and service development in the market

Securities brokerage firms and their sales staff, when acting as intermediaries between buyers (investors) and sellers (issuers), can grasp the needs of customers and reflect them to suppliers of goods and services, providing ideas for designing products and services according to customers' requirements. The result of that process is to diversify products and services, develop customer structure, and attract more and more idle capital in society for investment and growth.

An example of success is Merrill Lynch, in the 60s and 70s while the main activities of securities companies were just trading stocks and bonds, Merrill Lynch looked for services that customers needed. Through that, they developed and created Cash Management Accounts (CMA) and Equity Access Accounts. Thanks to that, the company surpassed its competitors at that time.

5.2 Reduce transaction costs

In the stock market, which is characterized as a market of high-end products and services, to assess the quality and price of goods, people need a huge amount of money to collect and process information, train analytical skills and conduct the transaction process on a centralized auction market. Those costs are only available to securities companies.

Only large-scale professional operations can afford it. On the other hand, such a professional intermediary organization, which acts as a bridge for buyers and sellers to meet, will significantly reduce the cost of finding partners, the cost of drafting and monitoring contract execution. Thus, the role of the stock brokerage profession is to save transaction costs, both in each specific transaction and in the market as a whole, thereby helping to improve market liquidity.

5.3 Contribute to the formation of investment culture

The activities of stockbrokers when penetrating deeply into the business community and investors will be an important factor in forming an investment culture. When brokers approach and bring financial products that suit the needs of customers, this activity will gradually form the habit of investing in financial assets. Moreover, this activity will increase the habit and skills of using investment services, commonly securities brokerage services. Along with that is the increased understanding of the legal environment, and the awareness of law compliance because securities brokerage activities are a place where conflicts of interest arise and are revealed among market participants.

5.4 Increasing service quality and efficiency through competition

To be successful in the brokerage business, securities companies and individual brokers must attract customers, retain customers, and increase the amount of assets that customers entrust them to manage. This creates competition between securities companies and individual brokers. Therefore, it contributes significantly to increasing the quality and efficiency of services.

5.5 Forming new services in the economy, creating more jobs and enriching the investment environment.

With the motto of proactively reaching out to customers and providing the best financial services, every securities company has a team.

There are a lot of salespeople. For example, Merrill Lynch in the US has 13,000 brokers or other small US securities companies also have at least 1,000 brokers. It can be said that the provision of securities brokerage services has contributed to creating many new jobs for the economy and also enriching the business environment.

III. SECURITIES COMPANIES AND SECURITIES BROKERS

1. Securities company with securities brokerage function

1.1 General overview of securities brokerage companies

1.1.1 Concept of securities brokerage company

A securities company can be understood as a financial institution that trades in securities on the stock market. If the stock market is considered a “market”, then “goods” are securities and securities companies are “stalls”.

When a business wants to raise capital by issuing securities, they need to rely on professionals to buy and sell securities for them. That is a securities company - with professional expertise, professional experience and appropriate organizational structure, they can perform the role of intermediary broker, issue securities, provide investment advice and perform a number of other services for both investors and issuers.

Securities companies are important factors promoting the development of the economy in general and the stock market in particular. Thanks to securities companies, stocks and bonds circulate and trade busily on the stock market, thereby, a huge amount of capital is invested from scattered capital sources in the public. Thus, "Securities company is a securities business organization, with the status of

legal entity, with its own capital, operating under the economic accounting regime, operating under a license issued by the State Securities Commission" 13 .

In Vietnam, according to the 2006 Securities Law, a securities company must be a joint stock company or a limited liability company established in Vietnam that meets all the conditions to be granted an operating license. Credit institutions, insurance companies or corporations wishing to engage in securities trading must establish an independent securities company. The operating license of a securities company is granted by the State Securities Commission, allowing it to conduct one or several types of securities trading. The main types of business operations of securities companies are: securities brokerage, securities trading, securities underwriting, securities investment consulting and investment portfolio management. 14

1.1.2 Classification of securities companies

Along with the development of the stock market and the economy, securities companies have also been formed and developed in a very diverse direction, in terms of scale, field of operation, and nature of operation. According to the type of service provided, there are two types of securities companies as follows:

1.1.2.1. Discount Brokerage

Discount brokerage firms primarily help clients execute buy and sell securities orders, and are primarily suited to clients who prefer to make their own investment decisions.

Discount brokerage is used for three main purposes:

This:

 Long-term investors conduct market research, which are

Investors like to research and monitor market and industry trends and then choose stocks with great potential.

13. Prof. Dr. Dinh Xuan Trinh and Assoc. Prof. Dr. Nguyen Thi Quy, " Stock market textbook " of Foreign Trade University, Education Publishing House, Vol. 120

14 Securities Law dated June 22, 2006, Article 60

 Technical short-term investors, who chart stocks themselves, and trade on a short-term basis, often use discount brokerage firms.

 Investors who only trade once. For example, if someone receives an inheritance and wants to sell it, he or she needs a discount brokerage firm to help with the transaction.

1.1.2.2. Full-service firm

This is a securities company that provides a perfect service, from providing research results, analysis, advice to monitoring accounts and promptly giving necessary recommendations to customers.

Investors who use full service brokers are:

 Those who value the convenience of always having a professional advisor available to guide their buying and selling decisions. These investors view their brokers as their own personal attorneys or accountants, acknowledge their own limitations in the complexities of the stock market, and view their brokers as experts who are essential to the continued growth of their investments.

 Are people who need the personal attention of a full broker. They want a broker who keeps an eye on their account, informs them when needed and cares about their problems.

1.2 Brokerage activities of a securities company

In the early days, securities brokerage activities were only the activities of independent brokers, but when the scale of securities brokerage activities increased, it led to the formation of securities companies, which are organized groups of individual securities brokers.

A securities company or any other service business or manufacturing enterprise must perform well the marketing and sales functions. If a securities company wants to perform well the sales function, it must

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