No shortcuts to long-term success

“It was the greatest thing I’d ever seen,” Smith says.

Then, just two days later, Smith and his teammates didn’t dare put on anything bearing a maple leaf; doing so would risk being grilled by the international press about the exploding steroid scandal.

“What an influential moment in time for me,” Smith says. “It was really cool to learn so much that week. Ben went from the absolute peak of sport historically to the biggest disgrace the country had ever seen.

“Then,” he continues, “I had to concentrate on my own event. How many 21-year-old kids get that kind of global experience from a mental focus, morals, ethics and concentration point of view? What a great classroom.”

Now an investment advisor with Peters & Co. Ltd. in Calgary, Smith is arguably the greatest decathlete (10-sport track-and-field event) Canada has ever produced.

Smith, 46, realized early on that volatility was a big part of sports that had to be embraced, no matter which way the pendulum was swinging. Volatility also plays a big role in his current career.

“There are a lot of ups and downs, big peaks and valleys,” Smith says. “I have a pretty even-keeled personality and general perspective on things. I didn’t want to jump off a cliff if things went badly or party for three weeks if things went well.”

That outlook serves him and his clients well, too.

“If I can talk people off a cliff or tell them not to party too hard and just keep working on what we’re doing,” he says, “that bodes well for the financial advisory business.”

Smith developed an interest in the financial world while managing his own athletics career and as a commerce student at the University of Toronto. In the late 1980s and early ’90s, university athletes were required to put the money they’d won in competitions or from sponsors into an athlete’s reserve fund (ARF). Withdrawals were used to fund training, but the ARF also served as a vehicle to minimize taxes because athletes were taxed only on money they withdrew.

As a rising athlete with some capital, Smith wanted to put it to work, but Athletics Canada wouldn’t let any high-level amateur athletes invest in anything but Government of Canada treasury bills. After Smith’s agent, Elliott Kerr, appealed that policy, Smith was allowed to invest in other products. In the bull market of the 1990s, Smith posted double-digit returns with his broad-based investment strategy. Says Smith: “I thought, ‘This is fun, interesting and easy’.”

Smith, after retiring from athletics in 1998, met Don McPherson, branch manager with First Marathon Inc. in Calgary. McPherson took Smith out for lunch, talked to him about investment philosophies and asked Smith if he’d like to “job shadow” him for a few months.

“He taught me more in that four months,” Smith says, “than I learned by myself and in commerce over the past decade.”

After working briefly for a couple of firms, Smith landed at Peters & Co., a Calgary-based firm with a focus on investments in Canadian energy companies, at a time when dot-com firms were generating buzz. Smith was learning the benefits of investing with a strong “value” bias.

“I’ve narrowed in on a sector that we, as Calgarians and Albertans, do really well at. And it’s one of the sectors that Canadians excel at,” Smith says. “Energy is a really good place to focus your efforts and still apply your value-based investing.”

Although Smith declines to divulge the size of his book, he and his colleagues at Peters manage several billions of dollars for high net-worth and ultra-high net-worth individuals and families.

Smith says there are many similarities, as incongruous as it might seem, between being a high-level athlete and an investment advisor: on the track, Smith competed to win rather than not to lose – and he’s wired to outperform for his clients, too.

“I try to excel, and that comes down to focus,” Smith says. “My one sector of energy incorporates 100 variables. It allows me the possibility of being world-class and delivering exceptional returns to a majority of clients’ portfolios. There is a large percentage of athletes [at Peters] and an unspoken bias to want to be better and excel.”

Growing up in Kenora in northern Ontario, Smith says, he was fortunate to have been surrounded by people who provided guidance all the way through his athletic development. He has continued to live by a strong moral code throughout his career as a financial advisor, another profession in which participants can be tempted to look for shortcuts toward a shot at glory.

During Smith’s career as a decathlete, he was ranked in the top 10 in the world from 1989 to 1998, reaching No. 2 in 1991 and No. 3 in 1995. Smith won gold at the 1990 Commonwealth Games in Auckland, New Zealand, and defended that title four years later on home turf in Victoria.

If there can be any downside to Smith’s career, it’s that he underperformed at the Olympics. He finished 14th in Seoul in 1988 and 13th in Atlanta in 1996.

Today, Smith and his wife, Angie, have a two-year-old daughter, Sloane. When Smith is not in the office, he tries to stay active. He likes to take advantage of the many activities that are available within a couple of hours of his front door, such as fly fishing, bow hunting, skiing, mountain biking and a little golf. “It’s a whole new decathlon,” he says.

Smith and his family take a trip to Hawaii at least once a year, where he spends much of his time kiteboarding, while Angie takes part in some top-notch yoga.

Smith still gets recognized on the street as an athlete, which he attributes partly to the several weeks of television sports commentating he does every year. And he welcomes the business-building opportunity that recognition affords.

“It’s a great way for me to get my foot in the door to show the other side of my psyche, my big interest in finance and investments,” he says. “The majority of my clients know me from my Olympic career, but when 20- and 30-year-olds start becoming clients, I’ll be long forgotten from the sports side of things.”

Smith doesn’t have any of his athletic hardware at the office. In fact, until last year, most of it was in a shoebox at his parents’ house in Winnipeg. Now, eight of his medals from various international competitions are on display in his home office.

Three ways to avoid being “average”

After being one of the world’s best athletes for a more than a decade, Michael Smith, investment advisor with Peters & Co. Ltd. in Calgary, has no desire to be an average investment advisor. He offers three steps to excellence:

1. Get focused

“Concentrate your efforts, depending on the sector you have a bias for,” he says. “If you’re in Calgary, it’s going to be energy; if you’re in San Francisco, it’s going to be high-quality technology. Focus on one sector or one niche. It’s becoming tougher and tougher to be a generalist. The middle is a tough place to be.”

2. Hit the books

Smith, a voracious reader, tries to back up his bookishness by talking to real-world experts.

“You just don’t know what you don’t know,” Smith says. “The more education you have in the real world, the better. I’ll always be a student. I never stopped learning about each decathlon event, and you have to learn continuously in this industry, too.”

3. Learn from those around you

The staff at Peters & Co., including research analysts, institutional and retail sales teams, investment bankers and traders, meet every morning at 6 a.m. Smith shows up daily with his eyes and ears open.

“To discuss what could go on that day and where the funds are flowing is an incredible adventure,” Smith says. “It’s fun, it’s dynamic and the relationships you bring into learning about this business are really important.”

© 2014 Investment Executive. All rights reserved.