ING again voted best equity broker

Early in June 2011, ING Commercial Banking was voted best equity broker in the Benelux and Central and Eastern Europe (CEE) for the second time in a row; and for CEE it’s the third time running. This was the outcome of the Thomson Reuters Pan European Survey, better known as the Extel Survey. This shows that customers reward ING’s customer-first focus.

To find out the exact significance of this result, we spoke to Mark Pieter de Boer. Mark was appointed global head of Equity Markets at ING in May 2011, after previously ‘only’ heading ING Western European Equity Markets since January 2011.

Mark, congratulations on the trophy! What does it mean for you and ING?

Once again, customers have shown how much they appreciate the value we add for them. This is a 100% customer business. It is also a 100% transparent business. The great thing about the Extel Survey is that it provides an objective measure of the customers’ appreciation for the broker services provided by ING and its employees - because within Europe, the Extel Survey is the leading barometer for measuring customer satisfaction with brokers.

This year, 12,000 fund management businesses and over 2,000 fund managers responded online, on a wholly anonymous and voluntary basis, to indicate how satisfied they were with the advice and transaction execution by over 400 broker businesses and over 9,000 individual brokers.

Can you explain what an equity broker does exactly?

First of all, there is the research phase during which you develop the product, i.e. the investment advice, for the fund managers of the institutional parties. Secondly, the sales people ensure that our customers get the right products and, thirdly, the traders execute the required equity transactions.

Equity transactions are executed in the primary and secondary markets. The primary market is for equities that are issued for the first time. An equity broker like ING wants to play a role in that market, for instance by lead-managing an IPO or assisting with an additional rights issue. The secondary market is about matching the supply and demand of equities that are already in circulation.

And what is the key to success?

One essential source of success in this business is a good relationship with customers and with the listed companies whose equities are being traded. A good relationship with the latter category is vital to gain a proper understanding of the companies themselves, as well as of the environment in which they operate: today, yesterday and, above all, tomorrow.

What is the company’s strategic direction, how does this translate into its commercial activities, and what does this mean potentially for the bottom line? By building high-quality knowledge about all these issues, you as a broker, and therefore as ING, can prepare high-quality profit forecasts. This, in turn, serves as vital input for a good research product, which must then be taken to the customer.

Next, there are the customers: these are institutional parties such as pension funds. The key to success here, to my mind, is threefold. You must realise that this is a volume business with low margins. If customers see that you, as ING, can serve their interests in a highly professional manner with high-quality advice and excellent execution, then you, as a broker, are able, as it were, to earn these volumes and market share. So, first of all, you must have a good track record for advice and execution. Secondly, you need a good distribution platform and, thirdly, you must have a local relationship network and knowledge of the local market. ING’s strength in our home markets in Western Europe and in Central and Eastern European countries, such as Hungary, Poland and Romania, lies in the combination of an international distribution platform and local presence (for network and knowledge building). The competition either lacks that international platform or the local presence.

What else drives ING’s success?

Our strategy and our people. Briefly put: simplicity in the strategy alongside customer-minded people who are focused on service and can deliver that service on the strength of their knowledge and expertise.

Are there any areas of improvement for ING?

In four words: an ‘even stronger external focus’. We must be even more proactive in our approach to customers and listed companies.

What are ING’s other ambitions as an equity broker?

There are three. Firstly, to be the leading broker in our home markets. Secondly, we must move towards a product for our highly competitive Western European home market that consistently has and retains the very highest degree of credibility. Thirdly, I also want consistency in the profitability of our entire broker business.

Do you expect ING to win the Extel Survey in its home markets next year?

The trophy, as already noted, is very welcome, but it is not an end in itself. So I don’t see it as our end goal, but as an extra confirmation that we add value for the customer.