A key conclusion of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (aka The Royal Commission), is that close attention must be paid to culture, leadership, governance and remuneration practices.
When it comes to engaging clients, it means that we should always act in their best interests. In other words, selling is not a dirty word, but ensure that it based on client need first and foremost.
The Royal Commission gave light to sub-ethical practices, ranging from the seemingly justifiable to the unthinkable!
· selling products to people who don’t understand what they are buying;
· selling services to clients who don’t need them, can’t afford them or that are poor value; and even
· charging fees…even when the client has died
What permits or even drives this behaviour? Company culture. A culture which says:
Profits matter (which they really do!) at the expense of ethics and people (which they shouldn’t).
If culture allows us to turn a blind eye, then culture can help us to create an environment where we can be a valued and Trusted Adviser, instilling loyalty amongst clients and colleagues.
Four questions were submitted by Treasury in response to the Royal Commission and formed part of the final report. One of those questions was:
· What more can be done to achieve effective leadership, good governance and appropriate culture within financial services firms so that firms ‘obey the law, do not mislead or deceive, are fair, provide fit for purpose service with care and skill, and act in the best interests of their clients’?
The response to many of the issues revealed were summarised in the six “commandments” of conduct:
1. obey the law,
2. do not mislead or deceive,
3. act fairly,
4. provide services that are fit for purpose,
5. deliver services with reasonable care and skill, and
6. when acting for another, act in the best interests of that other.
Well that sounds easy enough!
So if culture allows us to turn a blind eye to unsavoury behaviour then the flip side says that culture can create an environment where:
· Clients feel known and valued
· They trust that you have understood their risk management needs
· They understand the options and recommendations you are presenting and the implications to their business
· They own the solution and understand the benefits
· They are happy to pay for your services
· People feel valued and proud to work for an organisation that looks after them and their clients, that makes a good profit...but not to the detriment of people and clients
There are many things we can do to address culture (we look at our Purpose, Vision, Values and behaviours for a start – but that’s for another article!). In a post-Royal Commission world, developing a Trusted Adviser culture matters more than ever (refer back to the 6 commandments) and this is more than simply having technical expertise, although that is important.
So how confident are you that you are a valued Trusted Adviser? After considerable research, I’m suggesting 9 qualities. Take a moment of reflection:
Thinking about how you engage with your clients, give yourself a rating out of 10. Perhaps think of a Service Provider who engages well with you by way of comparison.
How well do I:
1. Establish a real connection and affinity with clients – wouldn’t you prefer to work with someone you enjoy and get on well with?
2. Display passion and genuine interest in the client and their business – Isn’t it great when people are genuinely interested in you?
3. Actively listen, question and probe to understand client risk management needs – don’t you find that good listening and questioning can provide great insights?
4. Prepare and keep myself informed – you can just tell when someone is not prepared!
5. Challenge my own and others’ thinking – the outcomes are better when our thinking is challenged and we know that our providers aren’t just pulling out the same old same old
6. Provide advice from a client’s perspective – isn’t it better when you understand and own the solution?
7. Deal openly with clients – transparency is king – who likes to be lied to or even mis-lead?
8. Present written and oral information clearly – I’d like to understand what you are saying/ writing!
9. Deliver on my promises, acting with integrity – when you consistently do what you say you will do, trust will grow.
So how well did you do? I bet you have some real strengths….and some opportunities to further develop, challenge yourself, learn and grow.
So, pay close attention to building a Trusted Adviser culture. It mattered before the Royal Commission, and matters even more now.