Lessons from the greatest sports dynasties

November 17, 2016 by Patrick Meyer

An advisor allocating resources to his clients

About the author:

Patrick Meyer

Account executive

After graduating from the University of Wisconsin-Madison, Patrick helped individuals with their insurance needs. Now in the FinTech world, Patrick is driven by his desire to help advisors adapt and profit from the ever-changing financial landscape.

Running a small business is difficult — especially in the financial services industry with sweeping regulation changes, shifting client expectation, and new technology popping up every year. You have a lot on your plate and clients who depend on you. So how do you that your business runs smoothly and that you clients receive the attention and assistance they require?

There are a few lessons advisors can actually learn from the way sports dynasties run their business and team regard resource allocation, development, business operations, and goals.

Your resources are limited

Effectively managing cap space is the one of the common aspects to modern football dynasties. There is a very specific limit to the resources, and the money is not evenly distributed because the talent is not evenly distributed. Nobody can argue that a starting quarterback is not worth more to a team than a third-string receiver — it is the plain and simple truth. Because of this, a team will devote more resources to the more valuable player.

Advisors should consider following their lead when allocating resources in their practice. Most firms run an 80-20 business model where 80 percent of AUM or revenue is generated from the top 20 percent of clients. This also means 80 percent of resources need to be devoted to that 20 percent of “elite clients.” This does not mean, however, that advisors should ignore the rest of their client base. They must simply be more efficient with their time investment.

Foster strong financial development

Now, even though that quarterback is often considered “more important” than the third-string receiver, that receiver still has value. Someone needs to be on the receiving end of the quarterback’s throws. Furthermore, the most valuable players often do not begin their careers as “elites.”

Advisors should treat their book of business the same way. Just because a younger client may not be the most profitable right now does not mean they will not become a high-net-worth client later in life. This is precisely why advisors cannot ignore their “less valuable” clients and must provide them the resources to develop and successfully reach their goals.

Keep everyone on the same playbook

From your “third string” clients to your ultra-high-net-worth clients, everyone should be running on the same “playbook.” This idea boils down the way we often view fast food. Why do people eat fast food? It often does not taste good, it typically is not good for you, most people do not feel good after eating it. However, people know what they will get regardless of what franchise location from which they order.

This should be the same process for your clients. When you create and deliver a plan to a mass affluent client, that process should feel the same if they later become a high-net-worth client. No one wants to find out they are not receiving the best possible service, and this also makes for an easier transition as clients accumulate more wealth.

Do not lose focus on long-term goals

A nearly universal trait of sports dynasties compared to “one season wonders” is long-term focus. They know their fan base will be much happier with repeated success then immediate success. The same goes for an advisor’s approach to clients.

Advisors need to help clients with those goals that are most important today, but make sure you are always framing the bigger picture.

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