Business Forum • 18 July, 2024 at 1:39 PM
The management of Goldring, one of Romania's most active brokers in terms of trading volume on the Bucharest Stock Exchange (BSE), aims to register 200 clients for the new Discretionary account service this year and assets of more than RON 50 million. Goldring launched Discretionary account services in 2023, with the first account opened in October.
The service was launched as a premium service exclusively for a selection of 45 clients. The minimum amount to be invested for BSE Discretionary accounts is RON 100,000. Clients using the service have an average portfolio value of around RON 225,000.
The management also aims to grow from 200 customers at the end of this year to more than 500 customers with Discretionary accounts by the end of 2025, representing more than 10% of the company's customer base.
"The decision to launch Discretionary account services was the result of several factors. Among them was the need to simplify the investment processes for our busy clients with significant income or savings. Because, yes, we want to give our clients the opportunity to benefit from our expertise at minimal cost, without having to devote time and resources to analyzing companies and monitoring the market volatility. Discretionary accounts are premium accounts that allow the delegation of investment decisions to experts, thus providing a way to access market opportunities without requiring significant time on the part of the investor. Other factors were the increased demand for customized solutions, the desire to offer access to very good returns and the possibility for clients to more easily understand the market by following the strategy we propose,” said Nicolae Tudor, Head of Sales and Trading at Goldring.
Who are the clients who choose Discretionary accounts
Goldring's most common clients for Discretionary accounts are entrepreneurs, top executives and self-employed individuals (lawyers, doctors, consultants), as well as people who want to invest their savings without having to spend time learning about the field.
Another category of clients are experienced investors who already have knowledge and practice in the investment field, but want to diversify their portfolios. With Discretionary accounts, they can delegate investment decisions to optimize returns and agility in redistributing risk in the event of a major market correction.
Why clients choose Discretionary accounts
According to Goldring's data, in addition to the lack of time to make informed decisions, the transparency and accessibility of services are other important reasons why clients choose this service.
"Customers have permanent access to the situation of their accounts via the mobile app or the web platform, thus being able to monitor the performance of their investments in real time. They are also holding shares, which means that investors will also receive their dividends in their Discretionary account,” explained Dragoș Mesaroș, Investment Director at Goldring.
Among the main reasons why some clients are reluctant to choose such an account is the lack of familiarity with the concept.
"For investors who make personal decisions about their assets, the full delegation to a professional manager can be a difficult step. There is also a perception that Discretionary account services could involve higher costs compared with other forms of investment, such as mutual funds. Clients may be concerned that administration fees and other associated costs could significantly reduce the net returns of their portfolios, even though Discretionary accounts are more cost-effective than most similar products. In addition, for investors who are used to making decisions based on their own judgment and knowledge, trust in automated decisions or decisions made by a portfolio manager can be difficult to trust,” added Dragoș Mesaroș.
Goldring is one of the most active financial investment services companies on the Romanian capital market, offering investment advisory, discretionary portfolio management and execution-only accounts on both local and international markets. The Goldring team also offers investors complex products that combine different levels of risk and return appropriate to their profile. In terms of corporate advisory services, Goldring is on the lookout for successful Romanian companies to launch on the BVB. The brokerage firm Goldring was established in 1998 and is run by Virgil Zahan who is also the main shareholder.