Sunday, February 6, 2011

Lucky Broker, Lucky Client

The name on the client application was Arthur Hollingshead. The laws and convention demanded that the broker on the other side of the ornate and heavy antique desk Know the Client, and Earl Cappel had reasons of his own to screen with care.

The desk was the near-centrepiece of a good-sized office, with dark oak bookshelves filled with plush hardcover tomes. Only some of them had to do with stocks, other investments and economics. Taken in cursorily, they suggested a thoughtful literate man. An examination in detail would reveal many of those august tomes to be lightweight quickie books on current events. None of them showed any definite political affiliation.

Cappel himself didn’t quite fit the office. Overweight, he showed a subtle eagerness that would have made him an unfit hire in the eyes of the original owner of his desk. His dark hair with receding hairline was plastered on his scalp. His off-white silk shirt and muted red silk tie showed class. His suit was made of an especially smooth fabric with checker-boarded stitching and visible surgeon’s cuffs. He showed it, subtly, by buttoning and unbuttoning them while looking abstracted. The image he sought to convey was that of a thinking man, just as an executive fifty years ago would cultivate the art of the pipe. The eagerness was not only acceptable nowadays, but also was encouraged. He was a big producer, and rated a big producer’s office.

No broker gets very far without a reliable and profitable shtick. Contrary to his appearance, and the appearance of his office, Cappel’s shtick was anticipating takeovers in the gold exploration sector. At first, it had only been a sideline to his main focus on scrabbling good drilling news from them; takeovers had been traditionally few and far between in the sector. As the capital costs of new megaprojects grew, as the major producers saw their reserves diminishing, takeovers had moved from the periphery to the capitol. Claiming experience when few others had, he used his insights as a come-on. Prudently, he recommended that the bulk of a new client’s assets be put in a firm-structured basket of stocks. The light bulb went off in his head when he realized that dollars mattered less to a more openly eager client than the brag. This insight allowed him to square prudence with his come-on. It had guided his pitch ever since.

Yes, he had been good at crafting a smooth pitch that painted a picture of a happy shareholder on the right side of a takeover. His pitch emphasized good feeling, a war story for admiring friends and envious gym pals, means for a much-deferred splurge. It did not emphasize newfound riches.

Some of his anticipations had been very profitable indeed, which had caused his assets under management to swell to a plump eight figures. He no longer took accounts under $250,000, and had idly dabbled with raising the minimum to $500,000. For those who didn’t qualify, he personally referred them to an expanding list of small producers who needed the business. They tended to be five to ten years younger than his thirty-five, but he did feed one old guy who was always as risk of being culled. In an almost crass declaration of his ambitions, he hadn’t put the branch manager in his loop. Said manager was miffed at first, but she reconciled herself to it by noting that he had a habit of turning also-rans into solid producers. As a result, she benefitted by having an unusually low wash-out rate. As for his shtick, her greater experience convinced her that he would either burn out or he was pulling something. Either way, it was a net benefit for her not to be involved. She had other means to keep the branch humming, and being included in his growing loop would have made her too dependent upon a single star.

Quickly checking the paperwork that had been dealt with by his sales assistant, he glanced at the wood-framed analog clock and a golden cube with 11.7 mm sides on his desk. Like most of his clients, Hollingshead would be in the capable hands of his assistant Mitch. Cappel would be generous with his time this once, so as to anchor his new client right.

“So, you’re an employee of the provincial government,” he continued smoothly as his dark eyes rested on Hollingshead’s lighter ones. Those eyes stayed placidly fixed on his new broker. “If you don’t mind me asking, how’s your job security?”

“Oh, it’s fine,” Hollingshead responded easily. He didn’t show it, but he was far more muscle than fat. “The department I’m in doesn’t have formal tenure, but hardly anyone’s let go except on retirement. If you remember, I told you I won the Lotto Max second prize. Almost three hundred grand.”

That gave Cappel his cue. “It must have been wonderful. Can’t say myself that I ever got that far; I’m only a broker” he continued with an appropriately abashed smile for the client. “The excitement: seeing your friend’s eyes light up –“

“Kid,” said the older man on the other side of his desk, “you don’t get my drift. Yes, I liked winning the lottery. The only reason I’m here is I want to keep winning.”

Cornered, Cappel’s eyes flicked around his office. “Well, yes. Mr. Hollingshead. Everyone likes to win, and you’ve managed to win big. But you must remember that –“

“I don’t think you get it,” Hollingshead continued more firmly. He was 190 cm tall, and was now acting it in his chair. “If you’re going to whine to me about safety, you’re only telling me how replaceable you are. Any one of those idiots –“ he pointed in the direction of the open desks – “can regurgitate the firm’s freezum. I know for a fact that you have leads, and I want them.”

Hollingshead had taken a bit of a risk with that gambit. Cappel’s demeanour, despite his old-school office and half-paid-off mortgage on a 5,500 square foot monster home, still radiated “hungry broker.” Had Earl Cappel had a few more years of million-+ commissions under his belt, if his house had been fully paid off, he might have had the gumption to genteelly throw the older man out on his ear. But, Earl was still building his business. Instead of standing up for himself, he instead assessed Hollingshead as a possible inroad to the provincial government. Lots of senior civil servants had a quarter of a million bucks on hand…

That angle was dashed by what Hollingshead had to say next. “You’re not one of those affirmative-action people, are you?”

Cappel’s mind raced across usual diplomatic channels, but his response was visceral. “Sir, those programs were put in place to help those who were cut out.” His slouch had almost disappeared when he realized how what he said could be taken.

The bigger man didn’t seem to mind, though. Instead he eased up and his eyes twinkled a little. “Well, you’ve said your piece.

“I guess you’re not interested in the others who think my way.”

The broker had recovered his smoothness, but didn’t back down. “The way I see it, those laws regularize situations where the aggrieved would otherwise take matters into their own hands.” His stomach puffed out he leaned back in his soft leather chair. Point made.

“All right,” his new client added, “but I’d greatly appreciate it if you don’t snow me on how you deplore vigilantes.” His eyes hardened slightly as he continued. “Kid, I know the waste paper says you’re supposed to put me in a whole bunch of doodads that cancel each other out. I’m supposed to fall for your line about how a ten thousand dollar windfall on twenty-five grand is supposed to make me all giddy-happy. But that’s not why I’m here.”

Seeing he had pushed Cappel hard-eyed, he added the bait. “Earl, old boy, I’m a lottery winner. Anyone, including you, who writes one will have the letters thrown clean out. That’s what I’ve done, and I was told to by the Lottery Commission. They won’t listen to you, no matter how good you patter.

“But they’ll listen to me because I happen to be one of them.” He now stood up, showing his full 190 cm, and made a motion as if to start pacing. Looking down at the broker, he added the climax to his own pitch. “Winning big makes me a fan of yours. Despite our differences.”

Cappel stayed in his chair. “Well, I could say my hands are tied. This is a full-service brokerage” – which Upper Canada Quigley, Lambert was – “and we’re obligated under law to protect everyone from themselves.”

Hollingshead sat back down, looking a little deflated. “Just give me the waiver.”

Looking again at the golden cube, Cappel turned to his computer and pulled up the standard form. His dedicated printer, located on the dark-wood carafe to his right, spat it out in seconds. He handed it over and the bigger man took it.

“Lessee… been duly cautioned; heard and understood; want to go ahead anyways; may be a damn fool; don’t care…” Then he smiled, and looked into Cappel’s eyes. His own were placid again.

“This is going to the regulators, isn’t it.” The broker nodded back.

“Okay! Now that we’re friends, I’ll sign it and date it.” Having done so, he flipped it on the desk only to see it slide to his broker’s paunch. Cappel put it aside, as it was going to be sent to the regulators through the compliance department. Pronto.

“Don’t mean to be too cozy, but I noticed you’ve got a sugar cube of gold on your desk. What’s that for?”

“Oh, that,” Cappel replied as he looked at it yet again. “It’s a reminder.

“Back when I was in university, I saw silver being offered for about half spot price. Not using my head, -“

“It was lead, wasn’t it.”

Not minding being cut off, the broker nodded. “Silver-plated lead. Had I melted the first one I got, I would have seen it.

“So, as a reminder to myself, I buy a one-ounce gold bar and take it to a kiln I have back home.” Reaching for a pad of custom-printed personalized and expensive paper, and pulling out a gold-plated pen, he quickly sketched out a mould that had enough space for a standard gold bar – about 42 by 25 mm area, 2 mm depth. Below that space, in the centre of the area, was a square hole 11.7 mm a side; the depth was slightly longer, giving it a slightly rectangular appearance. Cappel’s sketch, although quick, was fairly accurate. “The gold goes on top and melts down to a cube.

“It’s how I remind myself to always check on what’s too good to be true.”

Hollingshead’s eyebrows lifted up. “That’s quite a story you have. Mind if I have a feel?”

“Well – gold is malleable, so I’d appreciate it if – “

“S’alright, then. Never mind.” The bigger man got up.

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