One of the particular ‘buzzwords’ at the moment is the word ‘culture’. We see it crop up in all sorts of contexts.
An interesting exercise in this regard is to go to the FCA home page – you do have this saved as a favourite, correct? – and search on the word ‘culture’.
The top three results read as follows:
- Senior management must establish the right culture to convert good intentions into fair outcomes for consumers
- So it is a fair question to ask us ' How do you measure culture?'. ... There are four areas which in our view leaders can use to shape culture.
- FSA - Treating customers fairly - culture.
So a cursory glance at these summarised headings tells us that we have two issues to deal with here:
- The FCA clearly regard the culture of a firm as important, and, in turn, identify senior management and leaders as responsible for establishing and shaping that culture
- They themselves identify that measuring ‘culture’ is not straightforward.
Taking the last point first, one slightly tongue in cheek definition of ‘culture’ is ‘What do people do when there are no rules?’.
Well, straight away we have a complete clash with the traditional compliance operation. You know, the one that says ‘If it isn’t written down, it didn’t happen’ and where advisers have been known to ask ‘Where does it say I can / cannot do X, Y or Z?’
So that is one issue, but, frankly, who cares? In the words of Caligula ‘Let them hate me, as long as they fear me’. A natural compliance director if ever I heard one! So as long as advisers follow the rules, that’s OK, isn’t it?
But whilst advisers can, in theory, be ruled with a rod of iron, clients have this bad habit of doing business with whomever they choose.
And whilst we’d like to impress them with the size of our compliance manuals, in reality all the available evidence is that they do business with firms where they trust the advice. Where they feel valued. Where they feel that the firm has their best interests at heart.
In short, where the ‘culture’ is one that makes them feel safe.
So compliance is not enough. Ethics is a good start, but a truly client focussed culture is where we need to be.
The challenge before us then is as follows:
- What does this nirvana really look like?
- How do we create it?
- What role does rules and compliance and ethics play?
- What are the destroyers of this culture – the ‘Kryptonite’ of client care?
- And how does it really add value?
The role of this article – like the role of ‘deep thought’ in The Hitch Hikers Guide – is merely to pose the questions. At the forthcoming Illuminate live sessions, we will try to take on the role of ‘earth’, and address the questions directly. And I bet the answer is more practical than ‘forty two’!
I’ll see you there!