The success of an advisory business depends largely on its calibre of leader, according to a recent survey of 'excellent' advisory firms. But what makes a good leader?
Successful advisory firms do not carry on until regulatory or financial pressures force them to change route – they seek to control their own destiny through strong leadership and efficient execution, according to a report commissioned by Standard Life.
The study found that all 'successful' firms it surveyed had different formulas but they all had one feature in common: they had individuals at their helm who understood the market and direction of regulatory change, and had set clear directions and expectations for their business.
The study, carried out by NMG Consulting, interviewed a sample of 25 'successful' firms of varying sizes to determine the attributes most responsible for their sucess in achieving positive outcomes for both the clients and themselves.
Leadership input, alongside operational excellence, were found to be the two key themes that raised the standing of a firm.
What makes a strong leader?
Standard Life head of business services Innes Miller said the 'leaders' featured in the interviewed businesses all had a consistent and clear vision: "These are individuals who know where they are going and they tend not to waver too much around where they are taking the business."
While those leaders did not take direction from their advisers, they did cultivate a "culture of engagement", he said. "They do engage with all the staff and they work together in terms of where they want to take the business."
Good leaders have the ability to combine communication, clarity of direction, obsession with quality and continuous learning, the research found.
"They are very good listeners," Miller said. "They listen to their staff, they listen externally, they consult, they take on board ideas to shape their own thinking and to help them make decisions."
From time to time they recognise that the strategy will need to be recalibrated, he said, but typically they stick to the path, while avoiding any dilution of the quality of the service of their firm.
They are also very keen on exams, looking to consultants and the international scene to see "what can be learned from best practice elsewhere", Miller said.
He added: "If mistakes happen in the business these mistakes are dealt with positively and worked through on a team basis."
All in the details
The research also found that strong leaders almost always possess an obsession with attention to detail and quality in the business, reaching right down to the arrangement of the office.
Miller explained: "They have fresh flowers there, a bowl of fruit, the books on the coffee table are all nicely aligned, there is attention to detail right across the business.
"What it comes down to is the quality of the entire experience and making sure when the client comes in they feel that they are dealing with a professional business and someone that's very much thinking about the clients."
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