Snapshot
The manager: Todor Breshkov
The company: The First Financial Brokerage House
The job: Managing director
In brief: Breshkov’s career has always been at the FFBH. He has had two positions as financial analyst and corporate finance expert before taking the helm in 2001. He shares the management of FFBH with Svetozar Abrashev.
Family pictures have one distinctive quality: these snapshots of memorable moments keep featuring the same faces year in and out. Blood is thicker than water and no transfusion can change one’s blood for another (with the exception of some recent miracles of science that frequent more specialised magazines than day-to-day life).
Oddly enough, blood is not what interweaves First Financial Brokerage House (FFBH), a company of 25. It is not a family business, yet faces inhabiting its office unwaveringly remain the same. On average, a mere 2.5 people a year have left the company because of plans to emigrate or in favour of a senior public office, never because of a rival job offer. Ninety-nine per cent of FFBH employees joined the non-banking financial institution fresh out of university and have stayed ever since.
Todor Breshkov is no exception. In his early 30s, he has just a single employer on his CV.
Breshkov attributes the negligible staff turnover to the effort to accommodate a novice both professionally and as a person, the freedom to work on what is of interest and take leave for as long as is possible, provided that everything has been put in place so that colleagues do not suffer.
The policy of FFBH is to recruit a graduate, who will have no ingrained professional habits or working mentality, and educate them from scratch. Stealing people from rival firms is a no-go option, if only for the fact that a person is likely to come with a work style and mentality that is incompatible with the FFBH environment.
“Our goal is to train him and make him feel at home,” Breshkov says. “Whenever one sees that many of his colleagues help him out in the initial stages, this person feels much cosier in this team and it tends to build loyalty.”
Then there is the fact that while one always has his regular chores he can also tailor his business tasks according to interests. Breshkov believes this non-rigid approach is a win-win situation. Letting a hidden talent surface through a flexible approach to someone’s role yields better job satisfaction and, respectively, a better final result.
Breshkov, for example, has dealt with financial analysis and corporate finances before landing the post of managing director.
That smooth collective effort has brought to nil ambitions and inter-personal rivalry. Suffice to say, since 2001 when Breshkov became the managing director, he has shared – and now still does – his office with a colleague. The manager attributes the need to co-run the company with the fact that each person has his limit of competence and complementing his with those of a peer is to the good of the company.
A chance to grab
Loyalty, despite the plethora of offers from across the non-banking financial sector, personal qualities and that necessary bit of luck must have helped me come out on top, he says. “Sometimes you wait for something for 10 years to never have it, sometimes it takes a single year and you have it all,” he adds.
Breshkov has had his fair share of chances and has seized them. Chance, or fate, brought him to FFBH, too. While a student at Sofia University St. Kliment Ohridski, he was interested in analyst management and consultancy and the top of his employer list were banks and auditing companies. At the time, however, such positions were scarce because the market was yet to mature and foreigners were yet to see Bulgaria as a lucrative investment location so there was limited demand for such experts. However, FFBH, which was no different in its services offer, did see a need for such positions.
After job orientation into a company catering to corporate clients, Breshkov got the chance to work with Lazard and UBS, both based in London. Work with high-profile investment firms is never easy, he recalls. Their solid traditions, mentality and working practices pose the challenge of adjustment and full appropriation. It always comes, however sound the theoretical preparation.
“No matter how odd it may initially seem when comparing their mentality and working environment with yours, you end up concluding that their approach is the correct one,” Breshkov says. “Hence, it is better you adjusted and grabbed the opportunity to learn more than rest on the thought they have no other choice but to work with you.”
The lessons Breshkov learned sound seemingly simple, but are landmark in building the core of FFBH efficiency, where FFBH believes it gets its competitive edge.
Know what you say while shunning conditions is one. Then when you state an opinion, come up with the arguments in support because no effect comes without a cause. Show you know it.
“Another thing I learned that when you don’t know something it is better you admit it rather than improvise,” he says. “The reverse works to counter you and the people you work with.”
Third, preparation matters ahead of a meeting or a phone call with clients, as do deadlines and the clear-cut allocation of work, with everyone knowing what they are responsible for.
Learning is never-ending, Breshkov says.
Where we are
Breshkov finds it difficult to rate his company in the sector. Whether it be because of the versatile business profile of FFBH or the different benchmarks one can use for comparison or activities that are difficult to quantify and compare.
The brokerage activity is the easiest to measure because a broker is as big as its turnover. There, FFBH is in the top five in Bulgaria. The intangibles are the advisory services on bond issues, capital hike, initial public offerings (IPOs) and mergers and acquisitions. So is asset management. He shuns rankings by assets as conservative because sheer size of assets under management does not automatically translate to prime fundamentals such as return on equity or return on investment or the best allocation by sector. Hence, to pin the “best” tag based on a single parameter is misleading.
Furthermore, FFBH has a focus on institutional and professional investors. Knowledge of specifics in serving such clientele forms another of its competitive edge. Others, on the contrary, excel in work with retail investors. They require another type of work and service frequency. Hence, the disparate fields of activity makes the performance of such players irrelevant, Breshkov says.
Nevertheless, a rough comparison puts the company among the top five players in this field as well.
Size does not always matter
“One does not have to be big to survive,” Breshkov says when the talk turned to market changes that the flurry of notifications that European Union-registered peers filed with the Financial Supervision Commission last year might trigger.
The fact that the Bulgarian financial market opened after the automatic enforcement of the “single passport” mechanism will not lead to competition heating up. Competition on this market has always been fierce, he says. With long-time heavyweights such as UniCredit Bulbank, PostBank and Raiffeisen Bank it cannot be otherwise.
New players are hardly the single cause for consolidation and the sifting out of non-active players on the market, as some experts say, according to Breshkov. Rather, this is a natural process in the evolution of a market. The stock exchange, for example, has grown many times in the years when Bulgaria used to be segregated from the EU and its common market.
All the more, many a notification was submitted for formal reasons, as evidence that these international banks operate in all markets, he says. Pointing to Morgan Stanley as example, he believes that the US investment bank is unlikely to open an office in Bulgaria.
Look into the future
The market, however, matures and a natural aftermath would be concentration on quality and the offer of a full suite of financial services. Analogous is Breshkov’s vision for FFBH.
“The future is in asset management and related advice because the richer individuals and companies are, the more they will need more complex services and a service to be fully assigned to an expert,” Breshkov says.
The same goes with advisory services. He believes asset management and advisory services are too interlinked to be reviewed individually.
“If you come with money to invest, I am obliged to tell you not only about equity – the exchange is just one alternative just like bank deposits – but also about real estate, ferrous metals, among others,” Breshkov says. “We cannot inform a client just about a portion of reality and claim we have presented it in full.”
Breshkov draws his conclusion on the growing order log for such services in both number and monetary commitments. A concurrent trend to watch will be the setting – and extension – of investment time horizons. While previously an investor would entrust funds for one to three months, now “you can convince a client into a one to two year investment”. Although “people are yet to internalise the concept that it is both in his and the funds manager’s favour to fix time horizons, they will growingly have to live with the idea on launch of more products with mandatory time horizons.”
FFBH will remain faithful to its existing client profile and it will continue to cater to institutional and professional investors, affluent individuals and companies for the future broadened exposure to asset management and advisory services.
Breshkov would not commit to forecast what the range of products that will make up this complex service would be. He said, though, it would be tailored to leverage on the specifics of the Bulgarian market at the point in time. Furthermore, it would be a variety of instruments that were affordable to retail investors, such as contractual funds, and those that were suitable to affluent individuals.
In addition, the pick of new products at FFBH draws on forward-looking analyses of future demand. Research covers east European markets such as the Czech Republic, Poland, Estonia, Hungary, believed to be outpacing the Bulgarian market by two or three years.
Choice is also predicated on personal assessment of the non-banking sector’s demand at present.
Word of mouth
The client-oriented company believes that only a satisfied client can bring others.
“If 100 clients knock on our door,” Breshkov says, “we’d rather send some elsewhere because a company must always match capacity, both corporate and individual, with performance set as benchmark. It is better to give up some clients and work with the knowledge service will match promises rather than compromise on quality to process a larger base.”
This approach seems to pay off. FFBH has won 70 per cent of its new clients through reference from existing clients.
Breshkov depicts the preferred client as the one with a clear idea what he wants and needs. The reverse often takes place with services the client knows little about. Take IPOs, for example. Many firms want to stage IPOs; however, the problem comes when the procedure to pick a lead manager lacks clear-cut eligibility and selection criteria.
“Clients would lurk between price, quality of service, recommendations,” Breshkov says. “Then the procedure becomes protracted indefinitely, to the extent that we finally give up. The problem is not in the company’s lack of will, rather, in the fact the client has not considered priorities in partner selection in advance.”
Market loopholes
Hazy regulations and lack of unity in standards are the stumbling blocks to efficiency in today’s financial market. Turning to legislation, Breshkov said that the literal translation and adoption of European legislation has resulted in significant time losses. Unnecessary documentation as required by, say, the Securities Act “eats up” 30 per cent of a market player’s workday, Breshkov says.
“Amendments clearing redundant red tape that do not fit the Bulgarian environment will help the market focus on developing a better product and services,” he says.
The market’s main drawback is its inability to set its own behavioural standards, Breshkov says. “The process of consolidation will inevitably prompt the remaining players set common standards of work and behaviour,” he says.
Twin lifestyle changes
For one and a half years now, Breshkov’s day revolves around two main axes: work and family. The birth of his twins have changed his lifestyle and re-arranged his daily routine.
Now he has realised that a condensed eight-hour workday results in better efficiency than 16 hours a day at the office or weekend working.
“A person has to know when to leave the office because a job that would have taken a weary mind six hours can be done in two the next day,” he says. “I know that at 7pm I have to be at home. It is all about time management.”
When asked to highlight people who motivate him he points to people of principle. “I am not so much in awe of successful people, rather of value-driven people who know how to stand for their principles yet do not persist when strong counter-arguments are presented,” Breshkov says. “These are the people that inspire me because unfortunately we live in bad and ill-mannered times.”
Based on standard classifications, First Financial Brokerage House (FFBH) belongs to the small business category. By size of staff (25 in all) – maybe, but not by profile of clients or size of business. This business, which provides an array of services ranging from brokerage through advisory to asset management, works with the world’s largest financial institutions: London-based UBS, Lazard, Sopharma and Alcomet to name a few.
The FFBH turnover on the Bulgarian Stock Exchange (BSE) has increased by a factor of 34 from 10 million euro in 2001 to 340 million euro in 2006. The past three years saw FFBH’s growth at 93 per cent, the BSE weighted average rise being 55 per cent.
About 12 000 to13 000 clients have used the services of FFBH since its inception. At present, there are about 2000 active clients.
FFBH is among the five-largest players in the non-banking sector in Bulgaria.
