How We Can Help > Our Approach > People
Do the people in my organisation have the best capability, mindset and capacity to deliver change?
Why do we need to look at the People in our business?
The problem:
Perhaps the most notable challenge and significant conduct risk in the Financial Advisory and Wealth Management sector arises from the lack of financial guidance. Instead of providing advice that is truly beneficial in the long term, there is a tendency to cater to client preferences and desires in the short term.
Since the changes brought about by the Retail Distribution Review (RDR) in 2012 and a reduction in available advice, the financial industry has shifted significantly toward a 3% initial and 1% ongoing advice fee model. Despite efforts to move away from transactional commissions, the RDR unintentionally led to a shift from advice to facilitation. The introduction of Pension Freedoms in 2015 further intensified this trend.
Interestingly, there is not much concern, as client satisfaction is high (even if outcomes suffer), as clients receive what they desire (not necessarily what they truly need!).
However, the result of this fatty fast-food diet is that firms and advisors seem to have forgotten the art of giving advice. They are no longer guiding clients through the advice process and playing the role of a “critical friend” or a helpful voice, assisting them in overcoming the irrational behavioural biases we have learned about in recent years.
It is easy to see that to deliver demonstrably good outcomes in the future, we need to shift our mindsets in the present.
Therefore, we help you address the question:
How can we help to drive a change in mindset across our business?
Adopt a holistic approach
Fill competence gaps
Be outcomes focused
Link rewards to conduct performance
Diversify teams
Help advisers adopt a holistic approach to enhance client outcomes
We promote attracting new advisers and retraining existing advisers to provide financial advice that is in the best interests of their clients.
As a result, we believe client loyalty should shift from the individual adviser to the brand and proposition (the plan).
We recommend firms evaluate their team's competence, identify any gaps and invest in training to ensure your staff can confidently meet new requirements and expectations
With the new Consumer Duty, firms must continue to evolve their mindset around data - complete, accurate, recallable data will be crucial for conduct governance. This can only be achieved once everyone understands the importance of complete and accurate data that can be recalled and analysed in an easy and timely manner.
Empower Staff to focus on outcomes, not just rules and processes
We advocate enabling and encouraging staff to focus on delivering outcomes rather than purely adhering to rules and process. Where a process is seen to prevent or adversely impact the delivery of an outcome, the culture of a firm should empower staff to provide challenge and escalate this through appropriate channels.
One Team, One Goal: Tying Recognition to Firm-Wide Conduct
We promote linking the recognition and reward framework with the conduct performance of the wider firm e.g., long term bonus schemes or shared ownership. An effective way that we have seen firms adapt to improve culture and staff engagement is to offer a share of the upside performance (something that is often cited as a driver for the high service standards in the John Lewis Partnership model). A number of firms offering shared ownership models believe this is directly attributable in increasing positive outcomes for all stakeholders.
In conjunction with a move to a more data informed risk and governance framework, we also promote a shift in Recognition and Reward away from traditional measures such as quality of the paper advice file to more data relevant measures where relevant staff are measured by both the completeness and accuracy of key data required to manage conduct risk.
Foster Cognitive Diversity: Blend Teams with New Perspectives
Bringing in new team members during times of change can refresh perspectives and reveal blindspots. Their fresh eyes help identify areas for improvement that long-tenured staff may be unable to see. Blending existing experience with new voices who are open to evolve fuels innovation and progress. Making change positive hinges on cognitive diversity - by mixing up our teams, you gain that valuable advantage.
We promote challenging groupthink and sparking innovation by blending teams with new hires and cross-functional talent.
Interested in addressing the pressure points in your business?
“Exceeds expectations. Great workshop sessions, good collaboration, great understanding of our proposition and issues in taking to market, ideas were welcomed, love the simplicity of approach and key messaging. Great to work in partnership with the team. ”
Jackie Wilkins
Just
See how we can help you deliver better outcomes by addressing the other key pressure points:
Proposition
How can we increase profitability whilst ensuring we remain aligned with the FCA’s regulatory expectations?
Data
How can we materially reduce our operational costs without adversely impacting the effectiveness of our control environment?
Governance
How can we manage the conduct risks in our business without getting distracted from managing our business?
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Conduct Culture Ltd is a limited liability company incorporated in England & Wales with registered number 11955911.
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