Internship in Merrill Lynch Company Report

Executive Summary

As a student enrolled for a management degree with Prince Mohammad Bin Fahd University College of Business Administration, I was afforded the opportunity to pursue academic credit through an internship with a local business house that concerns itself with my studies. The internship is offered to any business school senior who meets certain university standards. I was presented with a chance to earn academic credit at the Dubai office of Merrill Lynch, an international brokerage firm.

The internship enabled getting valuable knowledge on several issues connected with the studies and at the same time, assisted in gaining invaluable experience in a private sector organization. Completing the academic requirements for the internship, this report summarizes the activities at Merrill Lynch and serves as evidence of the accomplishments during the internship.

This internship presents the background of the company and an analysis of the strengths and weaknesses of the company through a SWOT analysis undertaken. Despite the financial issues faced by it, the company retains its reputation in the industry as an efficient brokerage firm. After being taken over by Bank of America, significant changes have been brought in the working of the company. The report touches upon the marketing and competitive strategies of Merrill Lynch to give the readers an idea on the functioning of the company. A significant portion of the report deals with the technical part representing actual projects undertaken including problems and issues handled during the internship. The report is concluded with a summary of findings on the probability of potential changes in the corporate, growth and marketing strategies of Merrill Lynch and recommendations in these areas for improvement in the performance of the company.

Overall, the internship was helpful in learning ways of using classroom information in the real business world and the internship exposed in a practical way to many areas, which were taught in the classroom theoretically. The report concludes with the remark that the knowledge and experience gained in the internship cannot be replicated within the confines of the campus.

Acknowledgement

I take this opportunity to thank several people who were associated with my internship program and provided their valuable time and guidance in making me improve my skills and knowledge in a most practical way.

First of all I would like to thank, ………the internship supervisor for his valuable time spent on answering my unceasing queries and doubts in amidst his busy working schedule. Without his support, I could not have completed this internship program to my greatest advantage.

I would like to place on record my heart-felt thanks to all the professionals, executives and advisors of Merrill Lynch Dubai for helping me to complete the internship successfully. At various points of time during the internship, they helped me clearing a number of doubts, which enhanced my knowledge.

I would also like to thank my academic supervisor …… for providing me this lifetime opportunity of sharpening my skills. I thank every one in the University who have helped me to complete the training successfully.

Introduction

There exists a close relationship between banks, financial markets and the macro economy. These studies reveal that well-developed financial markets are necessary for the overall economic development of any nation. The investment banks form the foundation for the development of financial markets. In broad terms, investment management companies consist of firms whose activities relate to issuing, distributing and selling securities and other related financial products. The activities of investment banks include underwriting, brokerage and market-making. Commercial banks and several other financial institutions are involved in investment banking activities.

The firms operating in this industry appear to have a significant competitive advantage in undertaking investment banking activities and other brokerage-related activities. “Historically many of the securities firms have specialized in one or more of the product market areas, such as institutional brokerage, retail brokerage, exchange floor brokerage, or corporate and municipal finance. Other firms have engaged in a relatively full range of securities activities, but limited themselves to a particular region of the country,” (Hayes et al., 1983). Merrill Lynch is one of such firms having a worldwide presence.

Competition among investment banking institutions has received great attention during the recent period. The proliferation of the Internet and other information and communication technologies has increased customer knowledge on the availability of various financial products and services and their relative merits and demerits. Consequently, the customers have become well informed of the intricacies of investing their surplus funds and their choices and expectations of services from the investment banks have gone up tremendously. This has necessitated companies like Merrill Lynch to adopt suitable marketing strategies to market their products and services successfully.

Economic globalization, cross-border activities, and consolidation have made the investment banking industry go through an incredible transformation. The business environment today witnesses a number of banks crossing international borders to market their products and services in various geographical locations across the world. The role and importance of investment banking can be seen from their engagement in public and private market transactions for corporations, governments and investors and in providing a number of benefits to these participants.

The importance of banks involved in securities transactions is also enhanced because their services and efficiency of them affect the financial markets and the ability of investment banks in minimizing the cost and maximizing profits is important for both the banks and their clients. Investment banks also contribute to the improvement of various other industry segments (Radic & Fiordelisi, 2008).

In this context, graduation and master level studies in the finance discipline requires extensive knowledge on the service of intermediation between issuers of stocks and investors through their involvement in advisory, mergers and acquisitions, debt capital markets and equity capital markets. There are a number of problems and issues in these areas, which need to be understood by the students desirous of pursuing their carrier in the financial services industry including banking.

On-the-job training programs like internships, provide excellent opportunities for the students to acquire first-hand practical knowledge on the ways the banks and investment companies function. During the course of internships, the trainees are able to suggest feasible solutions to practical problems faced by the organizations, where they are undergoing internships training by using the theoretical knowledge gained by them in the respective universities.

This report summarizes the experience and knowledge gained during the internship training of the author in Merrill Lynch, Dubai.

Merrill Lynch – a Background

Merrill Lynch, one of the high-ranking financial services organizations is functioning as the security broking division of Bank of America after the firm was taken over by the Bank. Bank of America acquired Merrill Lynch when it was in financial distress during the year 2009. The acquisition by Bank of America has helped Merrill Lynch to expand the bank’s activities in the areas of investment banking. “Merrill Lynch is among the world’s top brokerages, with some $2.2 trillion in customer assets. The company also provides corporate finance and investment banking services to institutional, commercial, and government clients. Merrill Lynch has offices in some 40 countries around the world” (Hoovers).

Vision, Mission and Values

The company has not expressly published its vision and mission statements. However, a review of the Website of the company indicates that the company would like to maintain its leadership position in the industry by building and maintaining solid partnerships with clients and the company places the client relationships first. The company declares that it is proud to conduct its business based on the following unwavering principles.

“Client Focus, Respect for the Individual, Teamwork, Responsible Citizenship, and Integrity.”

Based on this statement found in the Website of the company, this statement may be stated as the mission statement of the company. The company’s Website also talks of trusted advisors, global partners, the culture of innovation and superior execution. Attaining these ends may be considered as the vision of the company in order to retain its market position. With a large number of employees, executives and professionals working in different functional departments, this report is unable to present a comprehensive organizational chart pertaining to the Dubai office of the company where the internship training was provided.

SWOT Analysis

SWOT analysis enables an assessment of the internal environment of an organization. This analysis is required to identify the core competencies of the organization together with the resources available to meet the organizational objectives. The analysis also provides information on the potential chances and risks offered by the industry.

Strengths

Brand Recognition – Merrill Lynch is an internationally acclaimed brand in the financial services industry with an industry leadership position. The acquisition by Bank of America adds further to its reputation worldwide

Resources and Size – the company has regained its power in terms of resources and size after being taken over by Bank of America as its investment-banking arm.

Knowledge and Expertise – functioning within the industry for more than 100 years the company has gained considerable knowledge and experience in the financial services industry and investment banking. The company is able to extend the best services through its trained analysts, brokers and advisors, as they have access to the vast amount of information and analysis on different companies

International Presence – the company has more than 60,000 professionals working in more than 40 countries making the international presence of the company prominent. The international associates existing in these countries are able to provide domestic experience coupled with the company’s significant and innovative financial products, and services and use of up-to-date technological backup.

Superior Execution – leadership position in the markets chosen by the company enables the company to practice superior execution of the transactions.

Weaknesses

No clarity in the Vision and Mission – the company lacks a clear vision and mission to steer the organization strategically

Recent Financial Distress – the recent financial distress suffered by the company and the ultimate takeover by Bank of America has affected the international reputation of the company and has created a fear among the investors

Downgraded Credit Rating – the credit rating of the company has been downgraded by the agencies which have a negative impact on its business

Opportunities

Mergers and Acquisitions – the company will be able to enhance the scope for future business by undertaking mergers and acquisition activities

Expansion in the Middle East – there is a definite opportunity for the company to expand its business by increasing its presence in the Middle East

Positive Outlook for Asset Management Industry – the continued positive outlook for the asset management industry, one of the specialized areas of Merrill Lynch will help consolidate its business in the near future

Threats

Consolidation in the Banking Industry – continued interests for consolidation in the banking industry will create more competition for Merrill Lynch in investment banking

Increased Regulatory Pressures – the investment banks are subjected to more regulatory pressures in the United States after the 2008 financial crisis, which is likely to affect the business of the company

Credit Crunch – the economic situation still looks gloomy with the credit crunch still in existence. This is most likely to have a negative impact on the business of Merrill Lynch.

Marketing Strategy of Merrill Lynch

Creating a close relationship with the customer has been the main marketing strategy of Merrill Lynch. The company pursues clearly defined steps while providing investment advice to a customer. As a first step, the company defines the needs of the clients, assesses the risks and period for which investments for which investments are to made, and makes complete investment planning. Secondly, a careful and complete research is done followed by a sector selection. Finally, the stock selection is made. Merrill Lynch is able to classify investor details, build better association and devote more consideration to the clients’ needs and preferences.

Merrill Lynch follows a system of customer segmentation, which is a traditional one in which the company distinguishes several types of customers utilizing the services of the company. The set of customers include a wide range consisting of short-term hyperactive traders to long-term investors. The company devises separate marketing strategies to tackle these different types of customers to meet their individual needs. A marketing strategy becomes successful, when it is aligned with the needs and wants of customers. This implies that the organization should have a clear understanding of the needs of different customers and the behavior of end-users.

Merrill Lynch used its brand image as its unique selling point for promoting its products to different types of customers. The unique positioning of the company in the industry enables the firm to attract new customers and the innovative products of the company support the marketing efforts of the company.

Competitive Strategy of Merrill Lynch

Building on the distinct reputation of its industry leadership and superior performance remain the competitive strategy of Merrill Lynch. Based on this reputation, the company creates a platform, which can be used for investing in the continued growth of the company. “Basically the competitive strategy of Merrill Lynch is to implement various strategies or actions that will provide the best growth opportunities for the company, maintaining the competitive nature of the firm, and building on their client relationships.” Investing in existing as well of innovative resources is an important aspect in the competitive strategy of Merrill Lynch.

The company is keen to develop the human resources, update its technology and offer new and innovative financial services to cater to the increasing needs of its customers. This forms the basic elements of the company’s competitive edge over the competitors. The company prefers to acquire a continuing view of the international demands for stocks and other securities as well as establishing a firm and long-standing association with the clients.

With the focus of the competitive strategy on investing on internal growth, Merrill Lynch has taken all steps to attract the top talent available in the market to develop and deliver unique financial products and services to its clients. When many of the competitors in the industry reduced their human resources in the area of financial advisors, the company continued to hire more talents to contribute to the success of its three major business divisions.

Several small acquisitions and investments made by Merrill Lynch enabled the company to remain competitive, promote its growth and strengthen its lines of business. These acquisitions helped the company to provide added servicing in the mortgage finance platform and to garner added capabilities in equities through electronic trading. The company acquired the regional broker-dealer Advest which added to its competitive ability.

Job History

Since the author of this report took up the internship as part of the academic qualification of a university, degree there is no job history that could be provided as part of this report.

Conceptual Framework

Considering the scope of this report and the complexity of the investment banking business, the literature definition of investment banking is provided below:

“Investment bank’s business can be categorized in to five main areas: broking (the broking of securities is commodity business in which firms appeal to customers mainly on price and integrity); trading (the trading of securities drives on market volatility); investment banking (represents the underwriting of new issues and advisory work also referred to as Mergers and Acquisitions); fund management (includes both retail and wholesale fund management); interest spread (income derivatives from borrowed funds),” (Gardner & Molyneux, 1997).

Full service and boutique are the two kinds of investment banks. Full service investment banks offer clients provide a range of services to their clients to meet their specific needs. These services include “underwriting, mergers and acquisition advice, trading, merchant banking and prime brokerage” (Radic & Fiordelisi, 2008). For example, Goldman Sachs is one of the investment banking institutions that offer several financial and investment services to the clients.

On the other hand, Merrill Lynch involved itself in innovative investment banking products. In contrast to the full service investment banks, boutique investment banks offer specialized services in specific segments of the market and they do not form part of any larger financial services institutions. An example may be found in Greenhill, which specializes in “Advisory services in Mergers and Acquisitions, financial restructuring and Merchant banking.” (Radic & Fiordelisi, 2008) Similarly, Lazard offers “Financial advisory and Asset Management services.” (Radic & Fiordelisi, 2008)

The market for investment and savings products has witnessed a tremendous growth in recent years both in diversity of products on offer and volume of sales. Consumer is able to divest their surplus disposable incomes, which have helped to increase investor’s spending on these products and while the transformation in fiscal policy and deregulations and improvements in information technology that have on set of varied types of investment and savings products.

Traditionally, the preponderance of these products is distributed through financial intermediaries who work on a commission basis. However, with the development of newer financial service product offerings and intense competition among market players, the necessity for evolving new techniques and strategies for marketing of these products has evolved. One of the relevant concepts in marketing is the relationship marketing, which is found to be more influential in establishing and maintaining customer loyalty and satisfaction for improved performance of retail as well as investment banks.

In the modern customer centric competitive business environment, customer satisfaction, service quality and customer loyalty have proved to be the major factors in establishing a casual and cyclical customer relationship, which is vitally important for the growth of investment banking business. With a higher perceived level of service quality, the customer remains more loyal and satisfied which in turn increases the business of the investment banks.

More specifically, financial institutions such as investment banks have increasingly understood the strategic importance of customer value. With this realization, the institutions are continuously striving to evolve and implement innovative strategies that could enhance customer relationships. In this context, it is to be noted that the product offerings of many financial service products are almost similar and only slight product differentiation is possible. This characteristic of the products makes the value of the loyal customers more important for the financial institutions. Such loyal customers are likely to use the services of the investment banks more, spread word-of-mouth, withstand the offers from the competitors and recommend the services of the particular banker to other potential customers.

Building close relationship with customers is sure to result in better returns to the institutions. In view of the excessive cost to be incurred in attracting new customers, the institutions seek to develop and maintain long-standing relationship with the customers, so that they can increase the profitability of the organization. The present day banks have moved from the concept of transactional-based marketing approach to a relationship based approach, which has customer relationship at its core. For developing sustained relationship, customer satisfaction has been identified to be one of the essential prerequisite.

Fierce competitive trends and saturation in the financial service product markets have enhanced the need to garner effective competitive advantages by banking institutions. The growing demand for the banking products and service through new media like Internet has forced banks to respond quickly to new changes challenges in customer demand and to meet them, with new and improved business models. The long-term relationship with customers is the key success factor in the service industry, which enormously increases with the electronic channels. “The proliferation of new channels and the high demand for differentiated products has presented customers with a wide choice in terms of which service to use in order to profitably interact with the bank” (Petruzzellis et al., 2008).

The latest extension in portfolios benefits both the customers and banks alike. Banks are provided with the opportunity of capitalizing on the beneficial characteristics of the newer product lines and channels of marketing. For example, electronic channels enable the banks to reduce the costs of interacting with the customers through the substitution of labor-intensive processes with the use of automated devices and sales processes. In addition, the interactions resulting from face to face consultation enhance the opportunities for cross selling of the products.

It is imperative that the banks undertake an active management of the usage of customer’s service so that the bank would be able to benefit from the different strengths of its portfolio. In this process, the banks are under an obligation to understand the ways the customers may adopt for choosing between the portfolios. The banks should also understand the circumstances under which the customers make these choices. This understanding will help the bank in identifying the factors that are relevant in influencing the customer choice and their relative importance in making the choice.

The decision by the customers to adopt a service is driven primarily by the perceived benefits and perceived costs of using the new product. The adoption of the product thus depends on the ‘value’ the product can provide to the customer. The ‘value’ in this case is represented by the service quality of the product and the convenience the customer can derive out of using the product. The customers will also consider the risk involved in conducting the transaction using the product and the costs of carrying out the transactions through the product. Perceived convenience, service quality and price are the key bank attributes which influence the perceived value of a service.

The perceived value of service therefore depends on the moderating effects such as circumstances under which the customer chooses the service and the distinguishing features of the customer himself. It is to be inferred that the importance of the bank attribute among convenience, quality and price for choosing a service is most likely to vary depending on the situations and customer features. In consistent with the literature, it is possible to distinguish between two dimensions of loyalty. They are: a past loyalty that is more associated with the customer’s behavioral loyalty. This loyalty represents the relative importance of a specific banking service in the previous transactions decision of the customer a cognitive loyalty, which implies the behavioural intention of using the banking service in future.

In the context of social capital effect on the usage or choice of banking service and its consequent impact on customer loyalty, commitment on the part of the bank becomes a key construct as identified by the social exchange literature and the relationship marketing literature. As perceived by the customer, the relationship with a particular bank is so important that the buyer may decide that it is worth investing in special effort to maintain such relationship for an indefinite period. Such long-term relationship enhances the exchange relationships and acts as stimulation for promoting the willingness of partners’cooperation and complying with mutual requests.

The partners are able to share information and engage in joint problem solving exercises. Commitment also acts to prevent the negative effects of switching costs. Lack of commitment on the part of the customers will make them switch the service provider more frequently than the committed customers, and thus results as being a more powerful determinant in retaining customers than continuance commitment.

There are a number of factors, which influence the marketing of the financial service products. These products are service based offers and therefore are characterized by a high degree of intangibility and complexity. These characters in turn provide a high level of variability depending on the market situation. Factors such as type of demand, delivery style, duration, and significance to the client also influence the marketability of these products. The peculiarities of financial services products may lead to a conclusion that relationship marketing is the right approach applicable only within the financial services product categories.

However, it must be understood that the specificity of relationship marketing to the financial services products is attributed mainly because of the high risks involved and the necessity for a long-term relationship in view of the involvement of the client for carrying out the service delivery process. In the case of investment banks, it becomes necessary to establish a balance between the transactional marketing and relationship marketing strategies for arriving at an optimal position. However, the point at which the investment bank balances both marketing strategies cannot be permanent because of the interaction of various factors enumerated above.

Repeated – passive Behavior

In this case, the clients show a reduced level of involvement towards the financial product because the clients have full knowledge and are conscious of the principal characteristics of the products on offer. With a low level of involvement and limited perception of uncertainty, the clients can be said to be behaving in a passive manner. This implies that the clients would involve them in repeated interactions without actively looking for alternative service providers or offers.

The relationship marketing literature describes this type of behavior as “behaviorist loyalty.” This kind of behavior is manifested towards more complex financial products and services such as current accounts, transaction accounts and to some extent towards deposits and loan accounts. The clients in this type are confident of opening and using a current account, choosing a particular bank based on factors like accessibility and quickness and comfort in service.

The Rational Active Behavior

In this relational context, the involvement of the customers in terms of their control on the processes, participation and contact is high. With the complexity of the products and services, the degree of trust of the clients is also high. “Clients that buy in accordance with the rational factors are those that have enough personal abilities and information that allow them to understand the nature of the products and to realize pertinent comparisons between offers of the players on the market.” (Filip & Pop, 2007)

For analyzing the suitability of existing products/services, the knowledge of the customers about the brands and reputation is considered important. At the same time, the clients are also keen on the price. Price has been one of the essential criteria in taking a decision on a particular product/service and for maintaining the relationship with the service provider. When the price of the present service provider increases, the intention of the client to migrate to another becomes prominent.

Decision not to Buy/Not to Contract

In this relational context, those consumers who do not buy or contract any financial services products are included. The consumers do not buy or do not contract because they do not show any involvement towards the offer of financial products or services; neither do they have the means to conclude any transactions with the banks. However, they represent a potential client base for any financial service provider or an investment bank. The financial institutions in order to lure this type of customers have to adopt strategies, which stimulate the interests of the clients by encouraging the appeal on different financial instruments. One of the ways of increasing the degree of involvement shown by the consumer would be to introduce easy and comfortable access to different distribution channels for the potential clients.

Rational Dependent Behaviour

The clients in this relational context show a dependent relational behaviour, in which there is a high degree of involvement from the clients but a low degree of control and safety level because of their need for complex financial products. The clients are in need of consultations from the banks or any third party agencies to decide on the specific product choice for investment. That is why these clients are described as dependent clients. They form a relationship with the banks on their will so that they can reduce uncertainties and perceived risks in their investments. In the process, they structure a typical model of buying pattern.

Technical Part

This section of the report presents a discussion on actual projects undertaken during internship at Merrill Lynch and methodology used, limitations, finding, and suggested solution

First project undertaken in the internship program was to evaluate and highlight 10 Chinese stocks with detailed explanation as to the reasons for choosing the stocks. The presentation included preparation of relevant graphs showing the performance of the selected stocks. The work involved preparation of technical analysis, printing of portfolio pages and distributing them to the financial advisors for revisions. The next project undertaken was to study and analyze the government securities with the objective of understanding their description, similarities and differences as compared to other securities. Another part of the project included studying a specific income fund (The Pacific Investment Management Company LLC) to understand the special features of this fund.

The next project was to prepare a summary of the development of Indian economy and the project work involved highlighting all the factors that contributed to the development of the Indian economy including analysis of its different sectors. The project work also included preparation of a report on the hindrances that impeded the growth.

A project to study about Gazprom, one of the largest energy companies in the world, which supplies gas to many regions across the globe, was offered as a part of the internship. The report prepared for this project presented a review of the activities of the company in the areas of gas exploration, processing and transportation to various destinations. In between attending the major projects, time was spent on reading the RIC monthly report presenting a comprehensive analysis of the current markets and financial trends in various sectors of different economies. The report is useful to get valuable advice to both the existing and potential investors.

Through a discussion with the internship advisor, knowledge on various aspects of emerging markets and the impact of factors such as globalization, technological advancement and entrepreneurial skills on the development of the emerging markets was gained.

One of the major tasks undertaken during the internship was to prepare a detailed report on the opportunities for expanding the investment banking business in the GCC countries. This report was elaborate in dealing with the opportunities and threats present in each of the GCC countries and the impact of political and economic situations prevailing in each of the countries. The report also highlighted the financial status of some specific companies in the GCC region.

The financial and general performance of certain companies situated in Saudi Arabia, UAE and Qatar were included in the report. The next project included understanding the process of introducing new security issues as offers to public investors, which provided complete knowledge on the various means of determining the risks of a given security offer and the means that can be used to set the premium for those securities. The evaluation of customers’ portfolio in terms of their financial needs, investment capabilities and available investment capital in order to draft viable recommendations to suit the investment abilities of the customers was the next part of the internship program. The routine works relating to the opening, transfer, closure and maintenance of customers’ accounts formed part of the next module of the training.

Case studies of the evaluation of the portfolios of an older and a younger customer were undertaken as a part of the training. In this module, the study related to interest-bearing loans, which gave an insight into the potential risks and benefits to the clients and the issuer that can be found both in short-term and long-term was studied in detail. Study relating to over the counter (OTC) market, where transactions that are not covered under stock exchanges are carried out was the next project in the internship. The project included studying the risks involved in OTC dealings, which is a legal and prevalent practice in the United States.

Internship covered a project relating to the study about New York Stock Exchange, which is the largest equities market in the world enabling trading in stocks, bonds and other securities. The next project was a discussion on the Financial Industry Regulatory Authority (FINRA) and its functioning. FINRA is a regulatory body that formulates rules and regulations pertaining to all financial transactions related to the exchange markets. The aim of the FINRA rules is to protect investors from unethical and unfair dealings as well as to regulate and monitor the financial markets to ensure that everything is done right.

The rules include procedures to be followed in buying securities, requirements and the various forms of punishment for noncompliance. This project was followed by the discussion on the various formalities and regulatory requirements to be complied with in the case of trading in securities. The regulations include the guidance by the federal and state governments on the ways conducting equitable business and the penalties for non-compliance. The final project dealt with the constituents of financial statements and bookkeeping such as ledgers, financial statements including profit and loss accounts, balance sheets, and bank reconciliation statements. The importance and interpretation of charts and exhibits as visual aids to facilitate the understanding of some of the concepts used in the financial services industry was highlighted in this project.

Methodology

The methodology employed for all the projects undertaken during internship include detailed reports and discussions on different topics. The preparation of reports required an extensive research to be done on the relevant topic to make the contents and presentation effective. There was the need to refer to a number of professional journals and books, and contributions by different authors in the related subjects. The information for discussion was also found from the financial reports of the companies or agencies concerned and their Websites. Referring to the internship supervisor on the current issues and problems that are handled by the regular employees and executives of Merrill Lynch added to the existing theoretical knowledge. During the internship, reports were prepared on the following topics.

1. An overview of the Indian Economy
2. Chinese Stocks to invest in
3. Analysis of Gazprom
4. Analysis of GCC Markets
5. Investment recommendations of stocks in the GCC
6. Portfolio management Case 1
7. Portfolio management Case 2

Reports were prepared and presented in MS Excel sheets concerning two case studies. A power point presentation was made on the topic of portfolio management.

Limitations

One of the major limitations faced at the start of the internship was to get guidance and assistance from the co-workers, as everyone had their own daily functions to be carried out. Lack of experience in making presentations and the stage fright impeded the effectiveness in presenting the cases. Lack of skills to plan and organize financial data was another serious limitation faced in accomplishing the objectives of internship.

Lack of knowledge and skills in researching and finding the relevant information about specific companies affected gaining speed in reaching the targeted time in preparing for the projects. Some of the calculations and terminologies used in the financial information about the companies were beyond the current level of understanding and this presented a problem in gathering adequate and necessary information for the project.

Findings and Suggested Solutions

As far as the projects are, concerned most of them were the practical extensions of the theoretical knowledge gained during the studies at the campus. The internship provided the opportunity to learn additional skills in preparing and presenting reports, researching skills and a broad knowledge on different areas of financial services including dealing in stocks, bonds and other securities. Therefore, there was new knowledge and experience added to the existing knowledge and skills.

The report on the Indian economy enabled to get an in-depth knowledge on the factors that contributed to the development of the economy as well as the factors that were impeding the development of the Indian economy. The case studies on the portfolio enabled identifying the needs and preferences of the customers belonging to different age groups and their expectations and risks associated with the planning for the investments on their behalf. The report presented on the Chinese stocks to invest in gave the opportunity to learn the intricacies of analytical methods to be used for studying the financial positions of different companies from their annual reports and financial statements. This exercise also enabled to gain knowledge on preparing visual presentation aids like graphs and charts.

Analysis of Gasprom helped acquiring researching skills, which are essential to become an expert financial advisor. Without the researching skills, it may not be possible to gather the complete information on the working and performance of any company. The analysis of GCC markets and investment opportunities in those countries offered the chance to study a wider perspective of the financial services industry and the way the functioning of the industry is affected by different economic environments. Case studies in portfolio management improved and sharpened the analytical skills and enabled the use of the textbook knowledge in practical situations.

The power point presentation on the portfolio management was possible based on the expert knowledge acquired out of the internship training. In short, the reports and case studies were the foundation for the improvement of practical knowledge for using the theoretical knowledge gained in the classroom studies. They also helped in adding some special skills like researching and analytical skills apart from extending the experience to real life situations. The able guidance of the internship supervisor needs to be appreciated in completing these projects efficiently and presentably.

In addition, there were some findings on the functioning of Merrill Lynch, which is worth including in this report. These findings include potential changes in the corporate strategy, growth strategy and marketing strategy of Merrill Lynch where making some changes might bring in additional business and customers to the company. These are explained in the section ‘summary of findings and recommendations’ below.

Evaluation of the Internship Experience

Beginning of August 2, until September 3, 2010 the time outside the class was spent at Merrill Lynch in the internship program offered by the company. Being an intern in the wealth management of Merrill Lynch was a wonderful chance to experience a real work situation. Each day of the training was different from the earlier day and helped enhancing the knowledge and ability in general. The best part of the training was the skill developed to make own decisions and use judgment to do the best work one could do. It was possible to understand that the important part of a financial advisor’s job is not only to create a sound portfolio for a client but the ability to maintain it by diversifying it across different types of securities.

The internship provided extended knowledge on this area. This internship laid the foundation for acquiring new skills and methods for making an efficient analysis of the financial status of different companies by reading the annual reports of the respective companies.

Presentation skills are one of the major benefits derived from the internship training. The internship provided the ability to form a fairly specific and accurate picture of the financial services industry, which is very important when one wants to pursue a career with an investment banking institution like Merrill Lynch. At the end of the training period, it was possible to understand that in order to become a financial planner, one should be able to work on his own, be outgoing and people oriented, possess adequate researching skill and have a strong sense of the market and the financial services industry.

Supplementing the academic learning with this internship has provided an advantage of gaining practical knowledge on the bookish version of many issues. It enabled the application of academic learning to one’s career and it uses the expertise and knowledge in the real business world. The time spent with the internship supervisor and other professionals working for Merrill Lynch is invaluable since the experience made the knowledge and wisdom complete in all respects to meet the challenges of the real world after the studies are over. At the end of this internship, I take away with me an irreplaceable experience, which I am sure, will help me in shaping my professional career and will provide me a competitive edge over other peers.

Summary of Findings and Recommendations

The findings of this report suggest that some potential changes in the corporate strategy, growth strategy and marketing strategy will help Merrill Lynch to improve its organizational performance. In respect of corporate strategy, there is the problem of the non-alignment of the current vision and mission with the evolution of the market place. Lack of strategic focus impedes goal formulation at the organizational level, which eventually results in an inefficient performance.

Lack of delineation between the products and applications, organizational competence and market-segment approach has led to ill-defined competitive scope. Under growth, strategy there is a basic problem with the organizational structure. The current mechanistic structure of Merrill Lynch leads to an inefficient allocation of the available resources. This is because of a redundancy observed throughout all the product departments. Another issue is that the E-strategy of the company has not designed as an integrated element in the corporate technology structure but developed as a separate component.

There is a lack in the marketing strategy with its segmenting and targeting in which over generalized segments lead to inaccurate customer targeting. The segmenting and targeting is further complicated with a complex product structure and offering. There is ineffectiveness observed throughout all levels of the organization and training for new products rollouts. There is no tangible input from the employees, who are the first point of contact with the customers.

The organization may take the following actions to improve the strategic areas.

1. Redefining the vision and mission statements and reevaluate the organizational goals in the light of redefined vision and mission. There is the need to emphasize the core competency of Merrill Lynch in the redefined mission and vision statements
2. Introduce a matrix structure of the organization so that there can be efficient management of resources and elimination of overlap throughout the organization
3. An integrated knowledge management system needs to be utilized so that the managers may be able to draw up to date information for decision-making
4. The organization should develop a Total Quality Management System to enhance employee relations and support of the employees to new products rollouts as well as to ensure quality in service delivery to the customer
5. Precise and elaborate market segments need to be determined. There is the need to develop a clear, targeted service offering through a product/customer matrix
6. The organization may continue to promote the Financial Consultant partnership with the customers, which is its traditional stronghold in terms of its competence. In addition, the company may build a database and an Internet interface to enable a fee-based market analysis, which will supplement as an online trading component.

Conclusions

The purpose of this report is to present the progress made in the internship training provided by Merrill Lynch as a part of the academic program. The report while providing the technical part of the projects handled in the internship, also presented a conceptual framework of investment banking. The report identified that investment banks gain competitive advantages based on the quality level of services provided by these institutions. The internship provided the knowledge that with the advancement in the information technology, there has been tremendous growth in the number and nature of banking products and services.

Economic globalization has also contributed to the increase in the number and range of products and services offered by banks and other financial institutions. On one hand, the number of financial products and services has increased. On the other hand, there have been increased expectations from the customers in the quality level of customer services from the banks. This internship also provided the knowledge that the development of information and communication technology has significant influence in the way the banks conduct its business and maintain the relationship with the customers.

The internship provided an overview of investment banking and the activities included in investment banking, and the competition among investment banks has increased in the recent period. Proliferation of Internet and other information and communication technologies has enhanced the customer knowledge on the availability of various financial products and services. The internship provided evidences, to support the fact investment banking is mainly a revenue-motivated one and marketing has an important role in promoting the business of investment banking.

The observations made on the functioning of Merrill Lynch during the internship enabled an in-depth study of the strategic position of the company and there was an opportunity to offer some suggestions for improvement in the organizational performance of Merrill Lynch. Methodologies used to complete the projects during internship, limitations that impeded the progress and evaluation of the internship experience formed part of this report.

Works Cited

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