No one would deny that the role of a leader in business is critical. It defines a business’ culture, staff retention, customer satisfaction – and in the end its growth and profitability. However this role seems to be far more crucial in the world of dealer groups, writes Anne Fuchs.
I have pondered for some time why it is that a business model’s success is directly defined by the person in charge, and particularly how this relates to the cult of personality in the dealer group world.
There are many examples of top-performing businesses in financial services that have growing market share and a trusted brand without the celebrity factor. What can dealer groups learn from this? Does it apply to their business model, and will it always be this way?
For the sake of protecting the innocent, names need not be given to prove the point.
However anyone who has been in the financial services industry for more than five minutes will be able to construct a list of well-known dealer group CEOs and quickly draw a link between the culture of the business during their tenure and, inevitably, the business’s success.
We can quickly describe their leadership style and personal values that penetrate every pore of the dealer group in question.
It can be seen in how their Approved Product List is constructed, how their head office staff responds to adviser requests for support, how a compliance breach is managed and which type of advisers they are willing to authorise.
The sincerity of their words and promises are tested daily in the adviser’s experience as their direct customer.
Peter Drucker, an Austrian-American Management Consultant born at the turn of the last century, contributed enormously to modern business thinking. One statement he made rings hauntingly true when it comes to reflecting on the rise and fall of dealer groups and their CEOs:
“Management is doing things right; leadership is doing the right things.”
Great leaders possess dazzling emotional intelligence, a zest for change, and above all, a vision that allows them to set their sights on the things that truly matter.
This theory can be extrapolated out and applied to any instance of a dealer group failing, such as an Enforceable Undertaking from the Australian Securities and Investments Commission, or equally to those that are growing and attracting the right type of advisers in a tough environment – advisers to whom you would refer your grandmother.
This is why I encourage advisers to critically analyse the CEO of the dealer group they are considering joining, to review that CEO’s personal drivers, their performance in previous roles, their values and their management style.
What is their mandate from the board of directors? Are they much loved by their staff, or conversely, are they repressed or disengaged?
Because as sure as day turns to night these character attributes will have a significant influence on your business once you are one of their authorised representatives.
Quite simply there is no escaping the cult of personality any time soon.
Why?
The role of a CEO of a dealer group is entrenched in responsibilities that cannot be automated, programmed or outsourced. It is a business model that requires the navigation of captain with a strong inner compass, one embedded with integrity and the necessary commercial overlay.
This is a time in our industry’s history where there is a lot at stake.
The CEOs, the leaders of dealer groups across the advice landscape, must be sincere about setting their sights high when looking to achieve the one thing they are truly responsible for – which is great advice outcomes for every single individual who receives personal advice from one of their authorised representatives.
Any errors of judgement by the leaders navigating the course, any decisions made that detract from that single, primary goal are not just a failure for the dealer group in question but a failure for all – and most importantly those grandmothers, working people or newly weds who are relying on us to give them the best advice to make the most of what they’ve got.
Dealer group CEOs who are sincere in their commitment to living by professional standards will set a high-water level for required qualifications for their advisory network and a zero tolerance for sloppy advice practices or a cookie-cutter approach to personal advice.
They will meet both the necessary business results required by their stakeholders and improve the net position of their clients’ nest eggs – because quite frankly, isn’t that the end game of financial advice?
Anne Fuchs is the founder of Pinnacle Practice, a financial services consulting group.
