The way advisers and principals react right now, as the coronovirus crisis deepens, will reveal everything about their character and who they are as leaders according to Matthew Rowe, the chief executive and managing director of licensee CountPlus.
In a note sent around to CountPlus principals on Friday evening Rowe set his expectations for the firm amidst a backdrop of widespread concern that the pandemic’s most significant effects are yet to be felt.
“We set the tone,” the note stated. “No panic. No rumours. Steady hands.”
Speaking to Professional Planner, Rowe says the key right now, in terms of leadership, is to respond to unfolding events in a calm and considered way instead of reacting in an emotional or knee-jerk fashion.
“We’re operating in a climate of imperfect information,” Rowe says, adding that its important for adviser and licensees to have their personal “bullshit detector” on high alert. “Don’t follow the noise.”
Business leaders in the advice industry should spare a thought for the level of character they display, he explains, because the person they are now will be remembered beyond the immediate crisis.
“Right now, this is when real advisers will stand up and have difficult conversations with their customers,” Rowe says. “This is the time when reputations will be made.”
The idea that legacies are forged in times of crisis is one that Rowe made clear in his company missive.
“People may not remember what you say during times of stress like these, but they will remember how you made them feel,” he stated. “They will remember if any of us appear overwhelmed with the situation.”
Some advisers – the minority – have the view that they don’t need to be having much contact with clients, he subsequently explains. “They will not do well.”
The severe market correction – roughly 25 per cent globally, depending on who you listen to – will hit the advice practices still running on a funds-under-management remuneration model the hardest, he notes.
“Having a sustainable business model that’s not sales related is really important,” he says. This will be exacerbated if the Australian Securities and Investments Commission resists calls to implement its planned changes including annual opt-ins for advisers. “A number of advisers and licensees will lose revenue,” he adds.
Rowe played a lead role in engineering one of the most high-profile transactions of the post-royal commission era when CountPlus brought Commonwealth Bank licensee Count Financial for $2.5 million mid-last year. At the time Count Financial had $8.1 billion in client funds under administration spread across 160 firms. CountPlus swiftly become the 11th largest licensee in the country.
He brings up an old proverb in his company note to hit home the need for perseverance in the face of the current challenges.
“Reputation is forged in iron and fire, not sunshine and roses,” he wrote.