MONEY 76 - LICENSES

THIS IS MY 76^TH BLOG ON UNDERSTANDING MONEY TOOLS

In this blog we are going to visit professional licenses that may help you in your work. We will cover the licenses I have held in my business life, and why they were needed.  Hopefully, through these illustrations you can relate to how these, or others,  may apply in your profession and reaching your goals.

To give you a little background, I was in the real estate, oil and gas and the investment/financial industry between 1971 and 1990 working with bankers, investment bankers and to a large degree most of the large Wall Street firms financing projects. Many of these firms and the people I worked with are no longer in business.

Let us first discuss these licenses, especially in the area of securities. At one point, I had my National Association of Securities Dealers (NASD) licenses Series 1, 7, 22, and 63. Today, instead of being regulated under the NASD these licenses come within the jurisdiction of the “Financial Industry Regulatory Authority” (FINRA). Why would a person have so many securities licenses and not be a stockbroker, like myself?  Well, I had a purpose for all licenses and needed them in my work; we will get to that later in this blog. 

My Series 1 license was replaced by Series 7 in more recent years. I was required to take this exam for licensing.  Just as technology keeps changing intricacies and strategies in securities have become more sophisticated, more training and testing are required to obtain the Series 7 license. (Many insurance agents get a Series 6 license that is abbreviated in scope to accommodate selling of variable products.)

My Series 22 license was for partnerships and private placements mainly dealing with real estate, oil/gas industries and structuring private placements for small companies needing money for growth.

Series 63 exam and licensing. The exam is regulated by the North American Securities Administrators and Association. It is a Uniform  Securities Agent Sate Law requiring licensees to know state security laws and regulations. This enabled me to do business in all states.

The above securities licenses need to be held with a broker dealer that has an employee who holds a Series 24 license, or principal’s license. The person holding this license can manage licensees, and is responsible for their professional activities.

Now, let’s take the above and make sense out of the licensing and how you can make a profession out of it as I did.  Prior to obtaining the above securities licenses, I got my real estate sales license in Colorado, subsequent to that I got my real estate broker’s license.  When I started in real estate I was in Vail, Colorado, and three people I knew including my real estate broker were planning a large development called Eagle Vail. This was a large planned community with mixed usage. Development money was needed, and it was decided to “register” the project with the Securities and Exchange Commission and raise money with a public stock offering. That is when I decided to get my first “securities” licenses as I could then receive commissions from bringing in investors, and make additional money selling land, lots and homes off as a real estate agent.

Our real estate brokerage went on to represent other “registered” real estate projects, including condominium projects. Many wealthy people who bought the initial stock also bought real estate for appreciation.  In those days appreciation was very good!

In 1977, there was a recession in the mountains of Colorado as many homes were not primary but second or third home ownership for people, and that market got hit badly.  I moved to Denver and a real estate brokerage offered me a position as broker manager of their company. Today, we refer to it as “designated broker”. In those days we received a salary, bonus based upon net production in each office, a company car, and expense account for entertainment.

If you have read my prior blogs you learned that I lucked out and was offered a position in 1979 with a very successful oil and gas company in Denver called Energetics, Inc. I witnessed the growth of the company from 18 employees to about 300 when we went public with Rothschild, Inc.  My background in management, finance and holding security licenses helped me get the job. My role was to start a corporate finance department, be the intermediary between the law firms, banks/investment banks, and our accounting firm, Peat Marwick. We structured both joint ventures and limited partnerships. My Series 22 license knowledge in partnership structuring came in handy. When the company went public in March 1983 we had about 900 limited partners, all structured into Reg D Exempt partnerships. (I won’t get into that explanation but limit it to wealthy people with assets in excess of $1 million excluding home and cars.)  The need arose for an investor relations department and I started that. My prior management experiences helped me lay forth the business structure, including department needs and hiring of employees.

After Energetics, Inc. went public I started my own investment firm in Denver, L.R. Nicholson and Co.  The company specialized in, real estate, oil and gas and small company funding; my licenses and experience were used daily.

Denver, Houston, Phoenix and other major cities were severely hurt with the economic downturn in real estate and oil and gas starting in 1985-6. I was forced to close my company and an accounting firm took over my lease and furniture, not a happy time. A bank trust company in the Denver area by the name Trust Company of America offered me a position as Senior VP, mainly in the area of corporate pensions. I was married, needed the work and took the job. In this capacity the company wanted me to be on a regular speaker series in the Rocky Mountain Area. To embellish my background and authority to speak on various topics, I added a couple more licenses to the ones I already held. These licenses were life, health and disability licenses.  So, here I am all licensed up, not for commissions but credibility and basic knowledge in various fields.

In 1990, a very wealthy family in the US who I had consulted for in real estate over 20 years asked if I would be part of a 6 man team to purchase $100 million in mortgage derivatives from ailing Savings and Loans. I left the trust company and took the consulting arrangement in New York City and Greenwich, Connecticut. Here my licensing knowledge and background in real estate and mortgages helped me. As I wasn’t familiar with derivatives I had to be schooled with the same training that Solomon Bros. brokers go through. With that knowledge the group had me write a presentation for what the family intended to accomplish with the money, and the basic understanding of mortgage derivatives. (When I say basic, I mean basic; only a specialist with very good computer software can understand the economics of a derivative package!)

In conclusion, obtaining licenses needs to have a purpose. The classes you need to prep for to take the exams are like college classes, in this case mostly law and regulations. It gives a good basis to work from, however your real learning comes when you get in the business and hopefully select a mentor or two to learn from.

Once out of the business you retire your licenses.  There is too much liability for you and the firm that holds your licenses.  Holding licenses does keep you on par with your business peers.

I hope this chronology has given you insight as how you can further your career using licenses and experience. I described quite a bit of my work life, and you can see that life has a lot of ups and downs. Few people get through life and their professions without setbacks.

MONEY 75 - SALES REVISITED

THIS IS MY 75^TH BLOG ON UNDERSTANDING MONEY TOOLS

To me, sales are such an important part of marketing that I thought I would write another blog on the topic. Marketing is the broad category that encompasses sales. To give an illustration of the spectrum of marketing it also includes advertising, technology, sales environment, displays, forecasting, product demand, and research.  Some people refer to marketing as the 4 P’s; product, price, place and promotion. Most of these elements still deal with people to some degree.  I say “still” as more and more companies are finding ways around the human being and using technology as a replacement.

Every day you and I are exposed to people representing companies that are selling products or services. In most cases I witness such poor salesmanship and shake my head in wonder as to “why”.  Most companies emphasize product, product knowledge and pricing, however they get an “F” when it comes to training of direct sales.

Many companies have gone to call-centers, these people are representatives selling a service for a particular company.  Some do a pretty good job, especially with politeness, if you can understand their use of English! I guess you can request an American-speaking representative. The corporate attitude seems to be “just don’t offend the customer”.  This is not sales.

Let’s backtrack. I think salesmanship has hit the skids along with reading, writing and arithmetic in schools. Technology has erased the perceived importance of direct selling in the business world. With on-line retail sales hitting an excess of 30% of all sales and increasing I don’t believe companies are going to increase expenditures to improve sales training in the future. The attitude is if the product is superior and the price is competitive, who needs a salesman. No salespeople, no training. The latest that came past me this week was banks starting to replace human beings in human resources with robots doing the interview process for employment. There goes the “human” from “human resources”!

Human beings make life fun and interesting for me both in my personal and corporate world.  With that said, I will address human sales tools in this blog.  There are many studies that show that when people shop there is an order to what they want. Surprisingly “fun” comes in first, many department stores like Target know this and it is part of their training. Then, comes product quality, pricing and salesperson’s knowledge of product and professionalism.  In the sales process/environment, but not directly related, is safety. You can’t forget the lawyers and possible liability lawsuits!

In our last blog we directed our attention to right and left brain thinking. This analysis for the sales presentation is all-important. You need to amend your sales delivery to each particular person, and adjust the tempo of your delivery.

I see many companies that try to sell products using the same style they did 40 years ago, and they wonder why they can’t do better.  For the most part we are now aiming sales at the millenials, ages 22-38, the movers and shakers with money and credit cards.  The salespeople need to be trained. What is expected of salespeople through the eyes of customers?,  You are selling to people, they are the buyers, they are the ones that make or break your bottom line, so companies better get this.

We have mentioned several times in past blogs relationship building between buyer and seller. This can be with an expensive item or a Starbuck’s coffee. Why do I go back to my Starbucks?  I have a relationship for about 20 seconds, at most, with the person behind the counter.  I either relate or not, I can buy an equal or better cup of coffee elsewhere, but I buy from the same 3 people most mornings because I like them. We communicate and connect quickly, and then the day moves on. Starbucks knows from their surveys why people buy from them. The good, friendly, fun service in a clean environment is foremost.

Let’s move on to more expensive sales. I do a lot of work with the national, large home-builders. They have been building the same basic home since WWII. Some have become a bit smarter researching and learning what  younger people want in home design and from sales agents, others don’t get it.  Most require their salespeople to know corporate policy, but never put their people in “really great” sales training, and yet this is where the sale of the new home comes from. Most of these companies have dress codes that are obsolete and the younger generation accepts it, but doesn’t relate. I recently went to one new home subdivision and there was a very attractive young lady who should have some spark but did not. She wore a matronly frumpy dress, no smile, no great welcome, etc. etc. You get the point. The first impression in the first 5-10 seconds is all-important. Sales managers today are young, poorly trained in people skills and not “people persons”. They mainly care about performance, bottom line numbers and don’t teach sales techniques. They do know technology. Get with it. You are selling to younger people with money. They dress in designer jeans, loafers, “T” shirts, and sandals. Get used to the tattoos!

Bottom line, if you want to do well in sales, be different from the norm today, learn people skills and have the customer remember you, and request you above others when doing business. You will make more money and the company will make more money, possibly helping you keep your job.