ASIC sees culture as a driver of conduct…A good corporate culture can be a driver of best practice, or ethical conduct. Ethical conduct can help organisations move beyond minimum standards and ‘tick a box’-compliance practices to best-practice standards and compliance practices that protect stakeholders and are commercially valuable. – Australian Securities and Investments Commission, 2016

Opinion | These thoughts, penned by the corporate regulator on culture in financial services, open an interesting window on the future governance standards facing our broader industry sector.

More than that, they reflect the past and prevailing experience for client-centric advisory firms such as the one I am privileged to lead.

Do I regard the sentiment ASIC expressed as accurate? Indeed. Our experience with client-centric financial advice over many years supports the notion that culture helps define a more positive, compliant and ethical client experience.

Our firm was founded upon, and continues to be guided by, the simple principle that the organisation must set the tone from the top, aligning around strong values, and that this core culture will accrue long-term commercial dividends.

If we get it right, the defining feature is that every client experience is enriched by factors not easily replicated. Loyalty and client satisfaction become our primary external litmus test for the efficacy of our approach, with results way beyond what ASIC describes as the ‘tick-a-box’ compliance standard.

The flow-on effect of creating and cultivating strong culture is the power to attract and retain good people. The last 18 months has witnessed a turn in the broader advice business cycle, when quality advisers have sought to reinvent their business, aligning with similarly minded advisers.

For us, the result of this was a generous surge in the number of quality adviser inquiries looking to move to new licensee arrangements – motivated by more than just the bottom-line or service standards on offer. We are seeing interest from advisers seeking specific attributes:

  • Private ownership, with an articulated emphasis on client-centric advice
  • Tangible business benefits, such as mentoring and business support; in other words, seeking a licensee that is acting as a true business partner
  • Goals-based financial planning, i.e., lifestyle advice, not one-dimensional product-based advice

Crystal clarity and community

The other powerful secret to a strong culture is transparency.

I don’t refer here to remuneration clarity, which is the typical industry understanding of being transparent. No, I mean the capacity for like-minded advisers to cross-fertilise: share ideas, support one another and build professional, outcomes-focused planning practices with a strong sense of belonging to an open and consultative professional community.

I believe our community – driven by the culture and values that are centred firmly on our client-first principles – explains why our firm had more than 150 unique expressions of interest volunteered by external adviser businesses during the last financial year.

There is a further story behind these numbers, and perhaps another pointer to the immediate future. That is, there are several advisers who are self-licensed but seek a partnership approach to gain access to a strong community and support services. Again, a function of strong culture.

Professional collegiality simply makes sense to these sole service traders, and by tapping into a proven, existing infrastructure like back-office support, and sharing ideas and mentoring services, these advisers gain the additional benefit of having their business raised by the rising tide of strong culture.

So, back to the words of ASIC and its position on culture. The cynical may well dismiss this focus by the corporate cop as a distraction. I would argue otherwise. The benefits are real, and consistently proven to us in no small measure by asking our advisers for their opinion.

We ask advisers to complete an annual survey to help ensure our approach is grounded, practical and making a difference. The measure we have chosen is the Net Promoter Score (NPS) system.

And with an enviable NPS score above 77 (on a scale from -100 to +100), the founders and leadership team of our firm are pleased to have built a strong culture that not only delivers great client outcomes but can also stand tall as a licensee of choice.

John McMurdo is group managing director at Fitzpatricks Private Wealth.


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