Financial advisors have many potential sources of advice on running a practice and servicing clients, from peer advisors to coaches to academic researchers and others. Sometimes it’s tempting to rely solely on the advice of people with a “hands-on” perspective. Because these people have had similar experiences in real life and can understand some of the more nuanced challenges that an industry outsider might not. For example, in the context of financial planning, it can be difficult for someone who has never worked with a client to understand the challenges in gathering the necessary financial data from the client. However, insights gained from outside perspectives can also be valuable, and can even be wildly misguided as to what the “done” believes will work.
The bodybuilder experience provides an interesting perspective on this dynamic, as it motivates you to learn as quickly as possible and do things that will help you reach your specific bodybuilding goals. One of the key questions for these athletes is how long they should rest between exercises to maximize muscle growth. However, while a study of bodybuilders found that short rest periods (30-60 seconds) were believed to be beneficial for muscle building, researchers used randomized controlled studies to determine: is longer In fact, intervals between sets (3 minutes) led to greater muscle growth. This is an example of external research that helps confirm accepted conventional wisdom among professionals.
At the same time, bodybuilders have the advantage of very fast feedback loops (because changes in workout routines can usually be seen very quickly, often within days or weeks), and they can usually identify the cause of new results (such as changing rest times between sets), but success as a financial advisor is much more multifaceted and subject to a lot of random noise that can be misinterpreted in a process that has very long feedback loops (effective business development practices can take months). , quarters, or even years). provide actual results). For example, if advisors are doing well in converting prospects to customers, it could be due to changes they made to the discovery meeting process, or it could just be the result of random noise (e.g., prospects who approached the company one month might just happen to be more engaged, while prospects who approached the company the next month might not be as highly engaged).
This raises questions for advisors about how to evaluate practice management advice and industry research, and which sources of advice to trust. First, while it may be wise to place more emphasis on advice and resources from those on the front lines trying to solve business problems, it is not wise to completely cut off the possibility of learning from other avenues (for example, a plan template designed by an outsider but tailored to the needs of an enterprise customer may be more useful than a plan template designed by another planner for another type of customer). Also, when reviewing academic research, indicators that advisors can look for to assess the research’s credibility and relevance to practice include larger sample sizes, participants similar to their clients, and qualified researchers with industry experience.
Ultimately, the point is that while those with field expertise often provide useful clinical management advice, academic researchers and others also provide valuable perspectives. Because, as the example of bodybuilders shows, commonly accepted wisdom among practitioners can benefit from being challenged by outside research.