Austin Philbin, senior vice president of relationship management at Dynasty Financial Partners, outlines the benefits of specialization, using the example of managing money for those with inconsistent income streams.

“Volatility” is a word we hear a lot these days. Three recent headlines from The Wall Street Journal underscore the uncertain nature of our times: “Investors in Market Volatility Enjoy Wild Ride,” “Why China Should Welcome More Volatility,” and “Volatile Stocks Confound Investors.” Indeed, today’s market jitters are even quantified. The Volatility Index, or VIX, spiked last August and has yet to quieten down.

While volatility can strike fear in the heart of Wall Street, it’s nothing new for some veteran financial advisors who specialize in catering to clients with unpredictable wealth streams. Three teams within the Dynasty Network work predominately with clients whose wealth creation is punctuated by outsized inflows, rather than steady streams. Their collective insights reveal some intriguing best practices across diverse forms of wealth creation and testify to the opportunities and challenges that volatile wealth can create.

Three of a kind

At first glance, Dane Crunk, David LaPlaca, and Frank Zecca appear to ply their trades in very different contexts. Crunk is co-founder of Syntal Capital Partners, a wealth management practice in Midland, TX, that caters to clients in the energy space. LaPlaca is the founder of Intellectus Partners, an advisory team headquartered in San Francisco, CA, that provides lifecycle services to entrepreneurs and business builders in tech, biotech and healthcare. And Zecca leads OFS Wealth, a practice that specializes in the wealth management needs of professional athletes in a wide range of sports across many countries.

The oil fields of the Permian Basin, incubators of Silicon Valley, and sports arenas of North America may be geographically dispersed, but they share an important trait: all have yielded tremendous spikes in wealth for a select group of exceptional clients.

Certainly, large spikes in wealth sound like an appealing client characteristic. What’s not to like? But in practice, volatile wealth creation can pose its own set of difficulties. Crunk, LaPlaca and Zecca have earned their reputations by guiding clients through triumphant—and sometimes tumultuous—moments in their financial lives. Their stories pinpoint two themes that drive advisor value: (1) The importance of industry-specific knowledge; and (2) The need for deft day-to-day management and a long-term plan.

Go deep

Speak to Crunk, LaPlaca or Zecca for a few minutes, and one thing quickly becomes apparent: They know their stuff.  Each advisor decided early on in his career to focus on a distinctive segment: energy, entrepreneurs and athletes, respectively. For some advisors, that concentration may have been dangerously narrow or counter-productive. For these advisors, it’s been essential.

“It’s a pretty specific niche,” Zecca said, speaking about his sports-oriented practice. “Athletes can generate substantial earnings over a very short period of time – the average professional career is only about 3.5 years. Our mission is to help manage that wealth – not just for the short-term, but for the critical gap between the end of an athlete’s playing career and when his or her retirement benefits kick in.  For most athletes, that’s a long time.”

Crunk echoes Zecca’s emphasis on specialization. “My partner Chad Clary and I decided early on that we could add the most value doing pre-liquidity planning for big events in the energy space.” This sector, Crunk contends, is “one of the most misunderstood” due to its highly condensed lifecycle and the illiquid and depleting nature of the underlying asset. Crunk brings a specialist’s insight to his work: “Energy provides a natural hedge for inflation, so oil and gas clients tend to be more concerned about capital appreciation than yield or cash flow. They also have a different mentality due to the volatile nature of their business. We understand their unique mindset.”

LaPlaca and his team have a similarly entrenched focus. “For the past 20 years, we’ve worked exclusively with business builders,” he says. “That domain expertise really sets us apart.” LaPlaca is particularly attuned to the lifecycle that entrepreneurs encounter, from the early days of structuring their businesses through a possible transition, sale, or next venture: “We’ve seen this lifecycle countless times. Every entrepreneur is unique —he or she has a new idea or a better way to do something. But we’re able to tell clients what’s likely to happen next and what they should be prepared for. And that caliber of insight helps them more than anything else.”

Outsized wealth does not come easily. For entrepreneurs, oil and gas owners, and athletes, their primary focus can be all consuming. That single-mindedness leaves little time for managing the complexity that significant wealth can entail. And that’s where LaPlaca, Crunk, and Zecca come in.

All three advisors point to a division of labor: the client focuses on his or her passion, and the team does the rest. As LaPlaca explains: “If you are an entrepreneur, your head is down. You are focused on making that business succeed: revenues, sales, partners, clients, and employees. What you may not be paying attention to is how to optimize control of your business, increase ownership, minimize your risk, and reduce taxes. That’s our expertise.” Intellectus relies on something an entrepreneur acutely understands: the business plan. “It’s all about the plan,” LaPlaca notes. “We develop a plan for clients to treat their finances like a business. We believe you can’t separate an entrepreneur from his business, or his business from his wealth. Those are the three legs our practice stands on.”

Zecca and his team also manage a confluence of details so that athletes can focus on the bigger picture. “Our clients are typically young so we assist them by managing all facets of their financial lives. Everything from buying houses and cars to managing cash flows to investing and preparing tax returns.” Zecca likens the financial plan to a detailed playbook. “Athletes are accustomed to being coached as well as setting and achieving goals.  We spend a great deal of  time educating them on what their current contracts mean in terms of living expenses, luxury items and taxes so we can maximize savings and investments. Focusing on the details mirrors their professional lives like a workout schedule or practice would.  Accomplishing these short-term goals leads to long-term success.”

Crunk also manages the details, but of a different stripe. He explains, “Most of our clients are focused on their businesses. They look to us for a global view, and how factors are going to impact them in Midland, Texas. Geopolitical risk, supply and demand, international risk – all of those factors move the energy markets.” Crunk and his team also direct critical capital markets functions for energy ventures. “The energy client is a habitual consumer of capital markets products; we help bridge the gap between what they know in the energy space and what they need to know to raise equity, borrow money, hedge assets, or sell assets.”

Staying in focus

Steven Pinker, a cognitive scientist and Professor at Harvard University, has asserted that “accomplished people don’t bulk up their brains with intellectual calisthenics; they immerse themselves in their fields.” It’s clear this precept holds true for financial advisors and clients alike. Crunk, LaPlaca and Zecca testify to the benefits of specialization, smoothing the way for their niche clientele. Their clients, in turn, benefit from the gift of focus: honing in on what they do best so that they can better capitalize on their extraordinary talents as wealth creators.