The Masters of Wealth Management

Just back from a WealthBriefing event, titled “The Elephant In The Room”, exploring the operational challenges facing the global wealth management sector.  It struck me that so many private bankers, wealth managers, consultants, media and others serving the needs of customers in that sector overlook the most critical “need”  – strong leadership – in favour of urging more time, money and effort being directed towards tactical improvements (enhanced customer experience, greater operational synergies, technological advancement etc.).

It is rather like the NBC commentator berating Rory McIlroy’s waywardness off the tee at Augusta last year on his new Nike clubs and his personal life. When it is blindingly obvious to the casual observer, it is his brain that needs to operate better, and more clearly, on the golf course.

Unprecedented levels of profitable growth, just like low rounds on the perfectly manicured fairways of Georgia’s fabled course, are largely a consequence of:

1. Exceptional and consistent decision-making (weighing up various outcomes and results, the need for advice and the degree to which you are comfortable making unilateral decisions)

2. Knowing when the right time to seek help is (time invested vs. level of conviction)

3. A willingness to involve subordinates in the strategy and tactics (honest feedback, constant improvement and increasing effectiveness).

The wealth management business has a small number of people running extremely profitable and dynamic businesses. However, it is largely characterised by a swathe of big hitters and some less powerful rattling around in the woods, chastising themselves for past errors, desperately trying to avoid regulatory sand traps, and hoping against all hope, to survive off a surfeit of miracle recoveries. Some might get lucky and avoid Rae’s Creek; others will wave apologetically to the fans and head off to the drop zone. All in the knowledge that it is not how far they can hit it, how sweetly they swung the club or how many sit ups they did in the morning gym session, it is how consistently they make the right decisions.

The overriding priority in the sector today is to help current leaders acquire the skills and competencies necessary to be an effective leader. In businesses, where that is in short supply, they need to bring in others from outside the sector, who bring a blast of fresh air (fresh ideas, insights and regeneration) and high levels of self-worth. The Wealth Management industry is a very worthy and important part of the Financial Services sector, yet like newspapers, airlines and banks, they must accept that past success is no guarantee of future success. They must learn to adapt to the situation, other competitors and the degree of urgency demanded by the regulators and their customers. That above all else requires strong and effective leadership, not a preoccupation with tactical improvements.

© James Berkeley 2014. All Rights Reserved.


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