By Dr. Rick Jensen

HABITS OF THE TOP 1%:

WHEN THE GAME CHANGES, CHAMPIONS CHANGE HOW THEY PLAY IT

With the PGA Tour FedEx Cup Championship wrapping up this September, it’s timely to reflect upon what financial professionals can learn from champions who dominated the PGA Tour this past year. For years, the phrase “Drive for show and putt for dough!” was asserted by many in the golf community to convey that putting was what mattered most when it came to golf results. Well today on the PGA Tour, this long-held belief could not be further from the truth. The best putters in the game are not the dominant players as demonstrated by their relative rankings (Sept. 2023) displayed in the chart below:

As you can see, today’s game is dominated by great ball-strikers (tee-to-green, off-the-tee). Comparatively, look at the top 3 putters on the PGA Tour, and you’ll see that they are not strong contenders.

Why?

Because of their relative lack of ball-striking skills.  As a matter of fact, these three top putters have combined to win a total of zero career PGA Tour wins. For the three players on the top of the tee-to-green list, they’ve combined for 38 Tour wins. I don’t mean to suggest that putting is not important, nor that Scheffler, McIlroy or Rahm are not good putters. Certainly, these champions must hole out their fair share of putts. Nevertheless, in the absence of good ball-striking, putting itself will not carry the day on the PGA Tour.

Over the past several decades, the increased value of ball-striking has been a result of changes in technology (golf ball, club head design, shafts) as well as players’ elevated fitness levels. Years ago, high-spin golf balls and clubheads that penalized off-center hits created substantial error in ball-flight, particularly as clubhead speed increased. The reward for swinging the club faster was not worth the risk of a ball spinning right off the golf course. As equipment has evolved, the ball now flies straighter and farther. Players began training differently given they could now launch the golf ball 300+ yards and keep it on the planet. The result – those who decided to alter their training plans, improve their golf swings and fitness levels, and play the game differently are rewarded!

So, what does all this golf talk have to do with financial services?

Well, ask yourself,

“As the competitive landscape of financial services has changed, how have I positioned myself, my practice, and my team for success in today’s game?”

You are likely quite aware of the changes affecting financial services – commoditization of asset management, fee compression, increased regulation, technology enhancements, and the transition from brokerage services to delivering comprehensive advisory services.

As these changes have taken place over the past decade, I’d argue that, like golf, there is a reshuffling of who the champions are at the top of the game. The financial services game is no longer dominated by stock and bond pickers, portfolio constructors, asset allocators, and “brokers” providing clients with access to investments. Such services are the equivalent of “putting” in the game of golf – they are certainly still important, but not by themselves. They must be complemented by those aspects of financial services that are more relevant today – comprehensive advisory services.

Today’s financial service champions are leveraging teams, technology, firm models and resources, and strategic partners to attract and serve targeted high-net-worth clientele. Top advisors understand that they must not only provide their clients with comprehensive planning and advisory services, but they must engage in deliberate, continuous improvement to do so. For you to do the same, consider the following improvements:

• Develop your comprehensive planning skills.
• Serve as portal for clients to access specialized team members and resources.
• Deliver advanced advisory services (tax management, estate planning, business succession).
• Pursuing advanced certifications (CFP, CIMA, CFA, CPFA, CRPC, CEPA, etc.).
• Build and manage high performing teams.
• Use technology to create efficiencies and capacity for building client relationships.
• Trust and leverage firm models where appropriate.
• Streamline your investment management processes.
• Develop advocacy networks that generate HNW referrals who value advice.