When adviser E. Kim Dignum invites clients or prospects out to play the hilly, meandering course at Mira Vista Country Club in Fort Worth, Texas, she obeys her one unspoken rule of golf etiquette: Play to win.
“I never throw a round for clients,” said Ms. Dignum, who has a 15 handicap. “If you're a decent golfer, you'll get their respect. They see that you know what you're doing.”
Like many advisers, Ms. Dignum views golf as much more than just a fun (or frustrating) game — it's a key part of her practice's growth strategy.
Indeed, since she first picked up a club 15 years ago to take part in the ritual of taking clients out on the course, Ms. Dignum estimates golf has helped drive 25% of her firm's growth. Dignum Financial Partners has $120 million in assets.
After a bad couple of years, advisers are once again scheduling tee times and looking for growth on the green by using the game to network with other professionals, prospect for customers and enhance relationships with existing clients.
Any avid golfer will attest to the fact that you learn quite a lot about someone by golfing with them.
“If a client hits a bad shot, do they blame it on someone or something else? Do they bang their clubs? You get a real sense of what that person's character is like,” said Jim Weil, a certified financial planner with Financial Strategy LLC, which manages $500 million. He has a nine handicap.
Besides taking a client out for a typical 18-hole — or 19-hole — meeting, there are a number of ways to integrate the links into a business strategy, advisers who play said. Some host golf clinics to meet potential customers, and others put on full-scale annual tournaments for clients and referrals.
Mac McGrew, a wealth adviser with The Harrison McGrew Group in Morgan Stanley Smith Barney LLC's Atlanta office, said that he prefers to set up small golf outings at least a few times a month.
Once a year, he and a partner take a handful of clients and prospects to a family cottage on Sea Island, Ga., for a few days to play the courses there.
Mr. McGrew, a 12 handicap, said that in some years, golf has helped bring in 50% of his new clients. And his total golf expense is just few thousand dollars, he said.
“I can't handle taking 20 people,” said Mr. McGrew, whose office manages $180 million for 95 families.
“I wouldn't get to spend any time with them,” he said. “The whole point is to get them out there for four hours, where there's no in-terruption and they're ours.”
Adviser Andy Berg, president at Homrich & Berg Inc., which manages $1.9 billion in assets, schedules a mix of large and small golf events.
Each April, for the Master's Golf Tournament at the Augusta National Golf Club, his firm invites a mix of 30 clients and referrals to his second home at the nearby Reynolds Plantation golf resort for the week. Invitees can play golf, attend the tournament or both.
Mr. Berg, an eight handicap, declined to disclose the cost of such an event, saying only that it is “expensive,” so the firm uses a careful screening process to choose the hottest prospects and the most valued clients.
Along with clients and prospects, Wil Heupel, founding and managing principal of Accredited Investors Inc., which manages $760 million, said that he strives to play regularly with local attorneys, ac-countants and other top executives to build relationships with “centers of influence.”
“Playing golf goes beyond just asking for referrals,” said Mr. Heupel, who has a 6.5 handicap and said that he spends up to $12,000 a year on playing golf for business purposes.
Regardless of the type of outing, advisers warn that there are a number of simple rules that golfers should follow to maximize the benefits.
For starters, advisers should plan ahead to make sure that the event or round is organized and paid for in advance. Once you have teed off, advisers shouldn't talk about business unless clients or prospects do first.
“Unless they bring it up, I don't talk about it at all,” said Preston Byers, adviser and founder of ClearBridge Wealth Management, which manages $120 million in assets. He has a handicap of 16.
Lawrence Adamo, an adviser with Geneos Wealth Management Inc., which manages close to $100 million in assets, agrees. “They know that you want to talk about business,” he said.
Mr. Adamo plays golf with clients at least once a week and has a handicap of 16. He also said that though advisers need to understand how to play the game, they aren't expected to be experts.
“The general rule in golf is, most everyone stinks,” Mr. Adamo said.
And though drinking and gambling are often commonplace on the golf course, advisers recommend following their clients' cue.
“If the client wants to bet a little bit, absolutely,” Mr. Berg said. “If the client wants to smoke a cigar or drink a little, it's fine, but wait for them to do it first.”
If you are hosting an event, even a foursome, the adviser needs to keep the game moving, Mr. Weil said. “If you're playing with someone who has a 20 or 30 handicap, you're going to spend a lot of time looking for balls,” he said.
Although advisers should limit the business chatter on the course, it is OK to contact golfers after a round to talk shop. Ms. Dignum said that she once played with two MBA students and learned that they were both interested in an internship.
“I hired one of them, and he was with me for three years,” she said.
Advisers may also consider following up with a small gift, said Richard Weylman, president of an eponymous consulting firm for advisers. For example, advisers can take pictures during the round or event and use an online photo service to make an album for less than $10.
“It gives you a reason to call them afterward, and it also helps them remember what a fun time they had,” Mr. Weylman said.
Above all, don't take the game too seriously, golfers said. Clients want to see an adviser who is in control and relaxed, even when things aren't going his or her way.
Despite playing three times a week, Ms. Dignum conceded that she still plays poorly every now and again.
“Everyone who plays knows that golf is like life,” she said. “Just when you think you've got it licked, it comes back to bite you.”
E-mail Lisa Shidler at [email protected].
