COL’s Top Executive Faces Up to the Challenge
Dino Bate, President and CEO of COL Financial
Once upon a time, he was young and reckless. He thought he knew all about stocks and took a gambit that he could not afford – one that flushed years of hard-earned money down the drain. But that mistake would forever shape Dino Bate’s beliefs about investing.
“At a very young age, I got to start investing, and at a very young age I lost everything,” he says. “That’s the best lesson I ever learned. And that’s the reason why I always tell people: There’s no short cut to getting rich. It’s important that you understand that the key to investing is not how much you can make but how you manage your risk.”
Now 50, Dino is President and Chief Executive of COL Financial Group, the country’s leading online stock brokerage firm. The ease with which he could articulate time-tested investment strategies these days attests to his extensive experience in money management. Having been in stock broking and fund management for more than 25 years, navigating stock market cycles – and helping others do the same – has become his way of life.
Going against the grain
Before carving a career in the stock market, Dino started his career in banking in 1986 as a Marketing Associate at the then small but dynamic Urban Bank. The following year, the bank decided to set up a team that would service the stock investments of its clients. When the bank scouted among its employees to lead this new team, Dino stepped forward. “The bank wanted somebody who would service its customers and provide them with research on the market. They tasked me to do it,” he relates. At 25, Dino became President of Urbancorp Securities.
For those who knew his family history, that seemed like fate intervening for him to heed the call of his heritage. After all, he’s a grandson of the Philippines’ first ever certified public accountant who made a fortune in stock investing. When World War II ended, his maternal grandfather Vicente Fabella had a windfall from his investment in copper stocks in the U.S., allowing him to rebuild his post-war finances and put up a school that would later be renamed Jose Rizal University.
But back in 1987, the stock market was unpopular. It was not regarded highly as a credible form of investing, but rather seen as a form of speculation. Although the country had the oldest stock market in Southeast Asia (circa 1927), after the regime of strongman Ferdinand Marcos, it had little catalyst to grow. Investors were wary of placing their bets on the new government of political neophyte Corazon Aquino, who would then be intermittently besieged by threats of military takeover. However, Dino saw this as an opportunity to learn something new and exciting. Expectedly, the key person he consulted on his career move was his mother, who shares his grandfather’s experience and encouraged him to take up the challenge. “At that time, learning about the stock market was practically self-taught. I kept reading books, international newspapers, research reports, and talked to many people in the industry who had years of experience. I had to do it all on my own,” says Dino. “But I really enjoyed it.”
The drive for continuous learning
In the next few years, an investment gone wrong helped shape his principles in life and formed his beliefs about taking risk and making money. “When you are young, you’re aggressive. I wanted to take a risk to buy my ticket to financial freedom and I bet more than I could afford on a stock. And then something happened,” he says.
At that time, he recalled, he was convinced that the stock was a good investment and that he was equipped with sufficient information. “Then the next day, Gringo Honasan staged a coup d’etat”— something beyond his control. I then realized that no matter how good of an investment it was, no matter how much research you have done, it always pays to manage your risk.”
Fortunately for him, he was still very young at that time and was able to recover from his costly mistake. Dino acknowledged that had it happened when he was much older, it would have been difficult to start all over.
This costly mistake encouraged Dino to learn more about investing money and managing risk. He made his next career move – a switch from the sell side to the buy side of the capital market. In 1990, he landed a job for the fund management division at the Philippine American Life Insurance Company. Philam Life, as the company is known, was a wholly- owned subsidiary of U.S.-based American International Group, Inc. (AIG) and the largest life insurance company in the Philippines. “Philamlife was an excellent training ground to learn everything I needed to know about the stock market. That’s where I learned the technical knowledge and skill set on how to value a company and manage funds.” Dino earned a return of more than 200% on the fund over a three year period.
At the peak of his fund management career in 1995, when he was contributing as much as a third of Philam’s earnings, Dino decided he wanted to take on a new challenge of building a business, managing people, and getting exposure to other world markets. He moved to become President and CEO of Abacus Securities to test his entrepreneurial spirit, and worked his magic to improve the company’s ranking from number 15 to become the top three brokerage house in the country in only a year’s time.
In 1997, he was invited to become the Head of Product for JP Morgan Securities Philippines, where Dino ensured the company’s position among the top three brokerage houses in the Philippines in terms of volume traded in the Philippine Stock Exchange. He also was the highest generator of revenue for the Philippine sales team for five consecutive years.
At the helm in COL
Dino is widely credited for the phenomenal growth of the company. From only around 250 clients in 2005, COL Financial’s client base has swelled to close to 50,000 at present with over P32 billion in customer assets.
COL and its proprietary online platform has revolutionized the way Filipinos invest in the stock market. Today, this Filipino owned company is the market leader owning up to 70% of the market for online value turnover and handles around 25% of the total trades executed in the Philippine Stock Exchange, securing its rank as the number one online broker in the Philippines. In 2012, COL was awarded with the first Philippine Bell Award on Good Governance and was the only Filipino broker recognized in the large Trading Participant category. This prestigious award is a testimony that COL has met the high standards for corporate governance of the Philippine Stock Exchange.
Since COL launched their service to the general public in the late 2005, the stock market industry has never been the same again. COL transformed the landscape for stock market investing in the Philippines – now all Filipinos, regardless of age, income, investment experience and even geographic location, can invest in the stock market through the use of the Internet and COL’s platform anytime, anywhere.
COL has been recognized for the growth of the retail investor base in the Philippines through its pioneering efforts of free investment seminars to the general public and its Easy Investment Program, which advocates long term investing through the peso cost averaging method.
At the onset, COL built its own proprietary platform to provide direct access to the stock market for customers to take control over their investments. Over the years, COL’s services have evolved to meet the growing demands of its customers by delivering value added services to improve their online investing experience. “We see ourselves as partners of our customers in building wealth. In the last few years, we have launched different products and value-added services to match the varying customer needs such as the personalized equity advisory service of the Private Client Group, regular market and company briefings, and seminars on advanced topics of fundamental and technical analysis.” Dino says.
Passionate and never complacent
He joined COL Financial, formerly called CitisecOnline.com, as President and Chief Executive in 2003, following an invitation from the company’s Founder and Chairman Edward Lee to build on his dream to provide every Filipino the opportunity to build their wealth in the stock market. At that time, the stock market industry was still suffering from its negative image and the perception that it was only for the wealthy and the privileged with the backdrop of the poor market sentiment. But this did not stop Dino and their team in pursuing the Chairman’s vision against all odds.
Since then, he has been adeptly steering the company, which employs a lean but highly productive team of 85. “I like to motivate and empower people. I like people to be able to have some sense of ownership in what they do,” he says, leaning on his back against a backdrop of books that include “Middle of Nowhere” and “How to Prosper.”
“I keep telling them that it is really important that you are passionate and committed to what you do. If you go the extra mile, you will go a long way.” His management style is one that leaves room for flexibility. He places work ethic highly and encourages the entrepreneurial spirit to continually learn and innovate. Indeed, such style of managing people seems to be working. The company’s growth is testament that its employees are happy, and so are its clients. Much of the company’s growth could be attributed to the addition of clients who are mostly referred by other clients, he also says.
Ultimately, Dino attributes their success to their commitment to their customers.
“We want our customers to be successful. We want their hard-earned money to work harder for them. And we’ve taken online stock investing a step further by educating them about the value of long-term investing so that the knowledge and discipline learned makes it a truly profitable experience. Through our efforts, we hope that Filipinos become smarter investors which will then lead them to richer lives,” says Dino.
The road to becoming a financial powerhouse
COL’s continued expansion has inevitably led to a change in corporate name in March 2012. “The old name limited the service that we provide,” Dino shares, noting that without a change in corporate name, they are limited by the products and services they can offer their customers who have different financial objectives and risk appetites. “We want to be the financial services partner to our customers in building genuine wealth, by being more than a stock broker.”
By 2020, COL foresees that every Filipino will have his own investment account and more people will be able to attain financial freedom at an early age. “We don’t aim to simply sell products but we are continually looking for ways to create value and build on our partnership with our customers in helping them build their wealth.” Going forward, more players are likely to enter into online stock broking as the market continues to grow, Dino says. But he is confident that the company will remain the industry leader as it builds on its core values. ”In the end, our customers’ success will also be our success and this can only be made possible if we continue to adhere to our core values of passion, integrity, commitment, excellence and teamwork.”
Strong values clearly resonate throughout Dino’s career and personal life, which he greatly attributes to his parents and shares so passionately with his wife, Kelly, former research head of JP Morgan Securities Philippines. Dino and Kelly are actively involved in raising their children, Kenzo, aged four, and Chiara, aged two, and he believes one of the greatest contributions to society is raising good, responsible and competent children.
“The greatest gift you can give your children is to teach the right values that prepares them for the challenges throughout their lives.” Dino ends.
Dino’s Advice: Stay Invested in Stocks
After a four-year upswing, Philippine stocks are still seen to climb albeit at a more modest pace this 2013. Stocks will be the asset class of choice as it is expected to continue to chalk up better returns among savings and other investment instruments available in the market today, according to COL Financial Group President and Chief Executive Dino Bate.
Dino pencils in an annual gain of around 8%-12% for local stocks this year, sharply exceeding the reed-thin returns from savings, time deposits, and other special fixed-income instruments like bonds that yield low single-digit returns.
“As economic growth accelerates and interest rates remain low, risk appetite will continue to remain strong,” Dino points out. In terms of sector performance, he prefers power, tourism, infrastructure, and consumer industries as these are the industries that will benefit the most from robust consumption and the government’s infrastructure programs.
With stocks prices commanding higher valuations, Dino also sees three key themes prevailing this year. One, a lot of companies will look at unlocking values, such as from sale of shares. Second, there will be more mergers and acquisitions as companies look towards increased efficiency and greater opportunities amid a more conducive business environment. And third, companies that pay high dividends will continue to be favored against the currently low yielding fixed-income instruments, he says.
Dino advises, however, that investors take a prudent and longer term view to investing in stocks. Although corporate earnings are still seen to grow well, “short term prices may be subject to some volatility amidst improving economic outlook in developed markets, which are at the moment cheaper than the Philippines today. Thus, corrections may well show a better opportunity to buy.”
For those who feel that timing the market may be difficult, he recommends the sure fire approach of peso-cost averaging on good quality companies. Get into the practice of setting aside a fixed amount of money to invest into these companies at a constant and regular basis over time regardless of market conditions. This will reduce the difficulty of trying to time the market, keep you composed even in turbulent times, and remain solidly invested into the company given its ability to grow over a period of time. “Remember investing small amounts over time in stocks will eventually be substantial as the value of the company emerges!”
COL Financial expects the Philippine Stock Exchange Index to hit 6,500 within the year, and eventually reach 10,000 in five years.
“The reason why the market has done very well is the PNoy factor,” Dino explains, referring to President Benigno Aquino III’s success in building investor confidence here and abroad. “People are encouraged and they feel more secure that the government is sincere and committed to improving the business environment by way of good governance.”