For more than ten years I have had an account with the same brokerage. Since last year, though, the commission I pay has been higher than what new clients are offered. I argued about it repeatedly and finally got it down to 0.01%, though some investors say they get 0.009% with the five-yuan minimum waived. Commission is not really my main concern—I trade rarely, so over a year the difference is small. I kept negotiating for two reasons: I did not want to be treated as a second-class customer, and I wanted to bundle several requests together, with commission serving as cover.
The real issue was the margin financing rate. I use my own money for long-term positions and leave it alone; margin is for short-term opportunities when they look attractive. A small difference in the rate adds up over a year, so I kept pressing. The brokerage always told me that because they are a top-tier firm, their rates are higher, and that I was already getting the lowest rate available in my tier. I believed that last year. Then a few days ago, by chance, I learned the actual range they could offer. My rate sat at the top of that range for my tier.
I had worked with the same account manager for years and thought she supported me and had done what she could. Once I learned the truth about the rate, I felt miserable. After thinking it over, I decided to move to another branch—not another brokerage, just another branch. Securities law gives investors that right. I did not consider changing account managers within the same branch because I care too much about other people's feelings and did not want to put her in an awkward position.
So I called a branch I had in mind and asked for an account manager with authority to approve margin financing. The person who answered said they did not handle that business and that I could not transfer branches. I said it was an investor's right. She said she would check whether a transfer was possible and call me back. A little later, my original account manager called me. The head of the branch I had contacted had phoned her and said I was unhappy with her service, and that if I had any complaints I should tell her directly. She already knew what I wanted, so she volunteered to apply to the branch manager for a rate concession. It came through quickly: the lowest rate in my tier.
Brokerages have been competing hard for the past two years, so they roll out plenty of perks for new clients. Existing customers rarely get them. Old customers, loyal customers, customers who do not make a fuss—all end up being discriminated against.
I did not manage to change branches, but I got the main thing I wanted. The other conditions were not met: free Level-2 market data and a shared VIP line, both of which are said to be negotiable for a new account with 500,000 yuan. They would not be very useful to me anyway—nice extras, not necessities—so I did not push further.
I did not know before, but now I understand: brokerage branches and account managers are graded. Larger branches and more senior account managers have greater authority and can therefore offer clients more support. If you are opening a new account, choose the branch carefully first instead of picking one randomly on the street.
Fees are not the only place I have been treated as second-class. My dividend blue-chip holdings have also been out of favor. While big money was retreating, I kept adding to my positions and kept losing. By now I have given back all of this year's gains and have started eating into principal. The market likes new stocks, small stocks, and stocks with a story. Old-economy blue chips are not even popular with dogs. I still cannot change my style, so I hold them patiently and wait for the market's taste to come back.
My mindset is stable, but I still cannot feel happy in this kind of market, and it seems to affect my life. So I have recently been learning about stock options. Since I have never understood why new, small, and poor-quality stocks become favorites, I want to strengthen my own understanding and use options to test my view.
Options have another use, too: they can serve as insurance for my old-economy holdings. I have always been bullish on dividend stocks, but the market keeps proving me wrong. Buying some put options on indices such as the CSI 300 to hedge against losses in my stocks is therefore necessary.