As the world of advice changes, do the characteristics to lead well also change, asks Virat Nehru.
When we think about the characteristics of a good leader, traits such as honesty, communication, confidence, positivity and creativity come to mind.
These qualities seem quite obvious. But are they enough to navigate the considerable change occurring in financial advice?
In the next few years advisers must grapple with a wide range of powerful forces so they’re on the right footing for long-term business success. These forces include new education requirements, aftermath of the royal commission, a changing remuneration model, as well as a wider change in demographics, technology and consumer expectations.
A certain savviness about such changes and an understanding of where they’re leading is important for those leading financial advice firms.
Learning from left field
There’s a clear example where we can glean insights into such intuitive leadership. It can be seen in the recent spate of high-profile public leaders with clear, often strident, opinions, who have found favour among electorates. From the United States, to Brazil, to Russia, to India, we’ve see leaders come to power that model themselves as in-control CEOs.
Jim Stackpool – managing director of Certainty Advice Group, who has provided management training to financial advisers for a number of years – distils the consumer sentiment that has made leaders such as Donald Trump or Narendra Modi, so popular right now.
“One of the things consumers are getting more and more aware of is their entitlement to a better deal,” he says.
“Those people feel they aren’t being looked after, cared for or heard by the political and institutional classes. And that’s a real, live movement among consumers whether they are searching for financial services or political satisfaction.”
Stackpool elaborates on how this sharper consumer awareness has impacted the financial advice landscape.
“Advisers and anyone serving the community, we have to make sure our core clients are being heard,” he says. “Not just heard from our lens – and this is the hard bit – being heard from the perspective of what they are saying.”
Shaping leadership styles from business planning
What leadership style can gain traction for you in a competitive, changing market?
A clear, appealing vision, consistently pursued, communicated in jargon-free language, should effectively position you in the marketplace. Consumers (and employees) respond to leaders who have a clear stance and don’t waver from it.
And that doesn’t just stem from personal style. That is an approach that must permeate your business in its planning, employee engagement and systems as well as vision.
Scott Charlton, a business coach who has been assisting financial planners in navigating their business in these uncertain times, suggests leaders in the advice space need to have a clear business plan that sets out the business goals and objectives that need to be met.
“You don’t want to be this cork bobbing in the ocean that’s at the mercy of the waves, the currents and the prevailing conditions,” he says.
You actually need to set a path, says Charlton, who suggests advisers have a one-page business plan that sets it all out:
- this is where we are going
- these are the strategies we must follow
- these are the things we must do to implement those strategies.
“You need complete clarity about your goals and you need to share that with the team. Decision-making becomes a lot easier when you have that clarity.”
Coming up with those goals, summed up in a vision is fairly simple for advisers, it’s pretty much to grow their own business while also growing their respective clients’ wealth or protecting it. Stackpool believes advisers need to have conversations with their clients that articulate this shared vision.
“It’s about re-asserting mutual purpose,” he says. “[The client] walked in here to get a better financial life. Unless [the adviser] takes charge and control of the conversation to really understand what those things are that represent a better life for that client and then talks about what products may be needed [they won’t stay around].”
Resilience in a disruptive world
There’s another key leadership characteristic we must talk about.
With the ongoing royal commission, increasing regulation and uncertainty around changing education standards, it is a challenging and disruptive time for advisers.
Matthew Dale, organisational psychologist and founder of Incorporate Psychology, sees resilience as key for financial advisers, given the ambiguity around the future state of the industry.
“We are in a period of disruption and advisers need to be resilient,” he says. “They need to have resilience in the moment but also through time. The concept of ‘resilience in the moment’ comes from being calm, keeping a curious mind and problem-solving. But also, expecting not to have all the answers and pick what is going to happen next.
“‘Resilience through time’ – you get that through having a sense of purpose. It comes from having a sense of direction, clarity of goals and really being able to answer the question why do I do what I do. It’s about connecting with your why.”
As Dale says, while advisers are facing a lot right now, there’s nothing new about change and disruption.
“Disruption is not new, it’s been happening in cycles forever,” he says. “What worked for effective leadership previously, some of those elements won’t work now.”
“Advisers need to have faith in the value of their advice,” he says. “In the face of all the fads that will continually come out, advisers have got to have faith that whether their advice is delivered in five minutes or over many, many years, it’s valuable.”
Charlton notes that even though the financial advice industry is changing it is still highly relevant.
“At the end of the day, clients are still going to need assistance with their personal financial wellbeing,” he says. “That will not change. So, there will always be a need for the fundamental services that a financial planner provides.”
Modern-day leadership strategies
- Articulate a simple and clear vision for the future.
- Reinforce a mutual shared purpose (with customers and staff).
- Adopt a resilient mindset.
These actions help advisers connect with their clients more effectively on an emotional level in an evolving advice landscape where customers are increasingly on the lookout for a better deal.