Financial Services organisations
Introduction
Because we’ve got particular experience of the Financial Services industry (having staff who have worked for Banks, Insurance Companies, Building Societies, Insurance Brokers and IFA’s both large and small) we have considerable expertise in this area. Our major research projects are also in the area of finance, with projects around how individuals make financial decisions (both good and bad) and with our research work on corporate decision making coming out of researching the decision making processes in FS companies.
We contribute regularly to industry publications, such as Financial Solutions (the magazine of the Personal Finance Society) and various Training and Compliance journals, both on line and on paper. We also provide speakers to professional institutes such as the PFS branches and the CII regions.
We provide a specialist resource to FS organisations to select and develop staff and leadership that will adapt to change (such as the RDR and TCF initiatives) and perform in an ethical and professional way. The services we provide are:
Selection
Because we have in depth knowledge of the FS industry, we can design accurate simulations of FS industry reality. This allows us to go beyond whether applicants simply have enough knowledge for the role (but will not perform in practice) to look at predicted performance and to assess the relevant trade offs in aptitudes and abilities. For example, we have designed simulations of fact finding and sales interviews for potential IFAs, looking at their actual performance in terms of compliance with procedures, influencing skills, creative solution finding and factual accuracy. We have similarly worked on computerised dealing simulations for stock traders and "business strategy projects" for senior banking executives.
The financial services industry is typical of modern organisations and is not an easy one for non-experts to select into because;
- The requirements are rapidly changing with the RDR and TCF initiatives.
- The roles – from graduate trainee to CEO - are knowledge based, it isn’t easy to observe whether a candidate really can do what they claim they can do until they are in the role.
- Simply having superior technical knowledge in the area does not guarantee superior performance.
- Superior performance often requires contrasting attitudes and aptitudes, such as detail consciousness and strategic view or routine following and creativity.
It is also in a state of flux with professionalism and ethics becoming increasingly important, but with the problem that both concepts are open to interpretation – what one person regards as sound professional practice may be viewed by another as being unethical. With our knowledge of the psychological basis of behaviour and belief, we can assist in selecting staff that have a disposition that fits the culture of the organisation and reflects the drive towards ethics and professionalism. Please feel free to contact us to see how we can assist you.
You may also be interested in the various articles we have written on these subjects in journals and magazines, such as Financial Solutions. There are also two papers that we have made available on this website. These are about the general design of Selection Systems and Assessment Centres. These give some of the principles that we follow and teach to clients.
Management Development
Despite the adage "people are our most important asset", at the start of 2009 13% of firms surveyed by the CBI were planning to reduce their training and development budget, if they had not already reduced it. But, to quote, Richard Lambert, Director General of the CBI, “now is precisely the time to keep investing in the skills and talents of our people”. We’ve written a paper on Management Development highlighting some of the key points regarding development in the organisations of the future.
The initiatives on Treating Customers Fairly and the Retail Distribution Review, and the post bank bail-out economy mean that organisations face a new environment. This is going to have several implications:
- A major feature of the future for the FS industry will be the control of risk. Both technical risk and business risk require accurate assessment, broad option generation and informed decision making.
- Boards and senior staff will have to be more aware of the broad environment. The business models and ideas that have worked for two decades of prosperity will need amendment in the light of different economic conditions, globalisation and technology changes, as well as a new cultural attitude, "post bail-out".
- Decisions will have to be moved down the hierarchy –nearer to the “coal face” or response times will simply be too slow.
- Are you confident that your predictions of financial markets and the timing of the next "boom or bust" is on a par with your product and market expertise and all of these are better than the banks who were supposed to be experts on financial markets? Or are you extremely good at what you do but not so sure of the potential financial risks of your strategy, bearing in mind all of the interconnected risks and the market unpredictability that has come to light?
- Are you confident that your decision making process controls all the risks or, like the banks (or Woolworths, or AIG etc), have you missed the apparently unconnected technology, market and product changes that have taken some risks out of your control and sphere of experience?
- Are you confident that your management team are all examining different aspects of the situation to anticipate dangers that any one person might miss or, like the banks, are your management team all following a plan that you think is safe, but that has huge risks that nobody at senior level has acknowledged?
All of these require a major shift in attitudes and behaviours – and changing those things is difficult. Without a structured and purposeful management development plan, they also carry extraordinary risks – risks almost equivalent to those of not changing at all. Alternatively, you can contact us to see how we can assist you.
Coaching
With the changing nature of the FS business, it is important that managers and senior staff are constantly developing their abilities. One way of doing this is individual or group coaching. Learning and continuing to apply new behaviours and managerial styles is not easy, but the drive towards professionalism in Financial Services makes it imperative.
One key element for Financial Services coaching is that it is individualised. Many organisations try to substitute generalised training for individual coaching. Such training, for example in Treating the Customer Fairly is well intentioned and complies with a Code of Ethics that, in principle, makes sense. Unfortunately, it often becomes a rule to be obeyed rather than a guide towards an attitude. Consequently, individual discretion and responsibility is lost and the result can be an unbending dedication to follow the rules, without considering what the individual client really needs or what the intention of the Code of Ethics is.
Particularly for senior staff, the attitude of "I followed the rules" can produce disastrous results – as can be seen by some bankers (and MPs) protestations that, "I didn’t do anything wrong, everybody was doing the same". Coaching of the individuals, with a clear individual goal and responsibility for achievement of that goal produces much more satisfactory results for the individual, the organisation and the ultimate client.
However, even a small organisation is complex, with the company as a whole, the management, the individual staff member, their direct reports and the clients all being affected by changes in behaviour. We therefore take time at the start of a coaching contract to establish the precise objectives, reporting lines, aspects of confidentiality etc. You may wish to contact us to discuss your situation and see whether we can help, or look at our notes on Executive coaching.
Strategy
Strategy is generally thought of as a way to direct all of the efforts of a company towards a long term goal. This might not work as well as it has in the past, given a future where markets are globally interconnected, complex and powered by new technology. We’ve made one of our papers on this subject available on this site, it covers some of the requirements for future business strategy.
A consequence of these changes is that your expertise at the top, that has been extremely successful in the past, might not be enough in setting future strategy. This has been shown clearly in Financial Services, where many banks made decisions in areas where they were subject experts and had massive experience and power. Those decisions didn’t always work out so well! So you might want to ask a few questions:
In relation to that last point, you might want to consider the following quote
“Loyalty to the group’s previous policies, or to the group consensus, overrides the conscience of each member. ‘Concurrence seeking’ drives out the realistic appraisal of alternatives.”
Irving Janis, (1972), Victims of Groupthink, Houghton Mifflin.
We think that may well sum up (although it doesn’t fully explain) the apparent ignoring of risk that was a feature of several banks’ behaviour in 2008/9. Contact us to discuss this area in more depth and to see how we can help you.
Training
Lord Mandelson, Business Secretary of State was quoted as saying, in relation to weathering the recession, “I would urge businesses to invest in skills and training to ensure they are well placed to take advantage of the opportunities when conditions improve.”
In the same way Paul Lothian, President of the PFS promotes both the increasing professionalism of the FS industry and the need to engage with clients in a more trusting relationship.
We specialise in training around financial capability. This includes workshops, seminars and training courses for IFAs and others advising the public, to ensure that staff advising on finance clearly understand the “human dimension” of money. This fits in with the initiatives on Treating Customers Fairly, and enhances the abilities of the advisors to engage with clients. It also, with the increased emphasis on CPD, allows fulfilment of some of the requirements the modern financial professional. We have set out some details of our services to help people in handling money, which you may like to read. This also gives you the opportunity to receive our newsletter on the psychology of finance.
We also partner with selected IFAs for financial advice on regulated products, and in providing joint financial training, where needed.
Employee Benefits
Money worries are one of the major causes of stress in the workplace – and that workplace stress costs UK industry an estimated £9.6bn per year. Providing support to staff facing an economic downturn (with its associated bonus cuts, threats of potential job losses and increasing credit pressure) can help to improve staff retention, and provides a benefit of genuine value.
Additionally, most businesses have a small number of key employees, which is the reason why "key man" insurance was devised. In the current economic climate it is natural that many staff will worry about job security, the financial strength of the company and their own finances. Obviously, if they are “there in body, but not in spirit” because they are worrying about financial issues, you need to provide support for them to tackle the issues or have contingency plans to deal with any consequent problems that arise at work.
Our direct support can include individual coaching, a telephone or workplace "clinic" or confidential financial coaching and advice for staff and potentially their families. For major stress reduction programmes we work with other expert providers – some of whom have been involved in designing the HSE’s national model for organisational stress management. Your organisation may also offer a Employee Assistance Programme (EAP) for staff, and we are very happy to provide input to the EAP provider to help them to help you.
In the same way, your organisation may be in the business of providing EAP services, in which case you may be interested in our services to Counsellors, Therapists and Coaches.