Practice Management

Applying Olympic strategies to business

Just like athletes, financial advisers who focus on preparation will differentiate themselves

Jan 26, 2014 @ 12:01 am

As a three-time Olympian, former member of the U.S. rowing team and 20-year veteran of the asset management industry, I have learned that there are many basic principles of success in athletics that apply to the business world.  

It comes down to a simple philosophy: Those who focus on preparation will differentiate themselves.  

In athletics, preparation generally means training, both physically and mentally. In mutual fund distribution, I have learned that wholesalers can prepare by segmenting the financial advisers they want to reach, and advisers can prepare by segmenting the types of clients they want to attract.

By focusing on a more targeted group, tailored to the type of services each can realistically provide, both groups can differentiate themselves.

Most athletes will tell you that it is during this time of preparation that the event is won, not during the event itself. Those who allocate the time and resources to prepare will find that success is theirs.

This theory proved true, on an enterprise level, at the 2012 London Olympic Games. Team Great Britain worked with a consultant to assess its chances of winning gold across all 41 sports. Through this analysis, the consultant narrowed the field to 18 sports where the team had the best opportunities.

Starting in 2009, it allocated the majority of its resources — including identification camps, training equipment and coaching — to those selected sports.

In the end, British athletes won 65 medals, making it the nation's most successful Olympics in more than 100 years.

Advisers can apply this exact philosophy. By segmenting the marketplace and narrowing the field, they can dedicate their time and resources to a focused list of clients and prospective clients who present the best opportunities for new or referral business.

By segmenting strategically and focusing their efforts, advisers can build stronger relationships with existing clients and plan a strong road to new-client acquisition.

Advisers can differentiate themselves based on how they approach segmentation. In an industry in which “product” providers are offering very similar products and services, allocating resources most effectively to serve and build that client base is key to long-term success.

MAXIMIZING TIME

As an athlete preparing for the Olympics, I spent about 90% of my time training and just 10% of my time competing in international regattas.

But in the real world, advisers don't have 90% of any day to spend researching clients and prospects to find ways to add value. Maximizing the time allotted to preparation is key, whether it is 10% or 50%.

Of course, performance is key in an adviser's business. Without strong returns, clients will go elsewhere.

But in our industry, there is often parity across many funds in a given asset class, and performance alone may not be enough to gain and retain clients. In the end, it might come down to the extras: the value that the adviser has added.

Here are three key areas:

Research matters. Building a deep understanding of clients and prospects before actually meeting with them is crucial. The free tools at our fingertips are better than ever. Use LinkedIn to research clients' business environment, interests and work history. Ask mutual connections for helpful information.

Build meaningful relationships and be engaged in the moment. Advisers should focus their approach. Narrow the field to focus on a core client base. This will allow advisers to develop a deeper understanding of clients, how they make decisions and what they are trying to achieve.

Add real value. Once advisers have done the research, they should take a step back and assess the areas where they can add real value to clients' or prospects' lives. Where can an adviser apply expertise to help clients? Is it financial education for their children? Is it helping them have difficult conversations with their aging parents? Whatever the case may be, advisers should offer their help.

As advisers look ahead, they should take a moment to assess their client service efforts.

In such a crowded industry, where it is extremely difficult to differentiate, you should ask yourself if you can afford to rely on performance alone. If not, find a way to use preparation time by stepping back and planning for ways to make a difference.

As a good friend once told me, “Different isn't always better, but better is always different.”

Jeffrey G. Klepacki is senior vice president and head of third-party distribution at Delaware Investments.

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