Rebooting the global asset management industry

Rebooting the global asset management industry 53 Indeed, in some asset houses, such teams have already become centers of excellence and are highly leveraged internally. Some are part of long-established virtual teams, embracing subject matter experts physically located in different locations and time zones. Some are focused on action learning that enjoins key staff to develop the skills of the learning organization: such as systems thinking and team learning that takes individuals outside their comfort zones and eschews group thinking. Another action being or likely to be implemented is the adoption of meritocratic staff compensation structures (42%). These aim to reward staff on the basis of their contribution to the business and their observance of its espoused values in their daily conduct . An integral part of the structures emphasizes the importance of developing a personal brand by working for an employer with strong values, culture and business performance that empowers individuals to maximize their creative and tactical talents, and being surrounded by like-minded professionals who share the same goals and ideals. In some cases, the values are or are likely to be embedded in HR processes and procedures such as recruitment , selection, retention, and deployment (48%). In particular, training systems are likely to be increasingly oriented towards acquiring soft skills, such as interpersonal communication and empathy, which are essential for effective client interactions and teamworking. HR is likely to become a strategic partner with the C-suite, making talent a top priority. In sum, a strong business culture can be a vital asset in communicating business brand, and one that is irreplaceable in the eyes of mass market retail investors. A strong business culture can be a vital asset in communicating the business brand, and one that is irreplaceable in the eyes of mass market retail investors. Insights A robust culture has a clear line of sight between values, behaviors and systems Companies can be like giant jellies. Unless you fundamentally reform the culture that holds them together, they soon wobble back into their old form. When it comes to changing them, there are no quick fixes, only hard graft. Our efforts to create a client-centric culture is based on the belief that culture has three overlapping layers. The innermost layer comprises values that define standards of conduct that everyone is expected to observe. The middle layer comprises behaviors that run with the grain of the defined values. The outer, and the most visible, layer comprises systems and controls, which provide checks and balances on behaviors so as to align themwith values. Our values aim to put clients first, understand their needs and risk appetites, minimize conflicts of interest and offer transparency around products, charges and fees. The behaviors we seek to nurture avoid mis-selling, sell products that are fit for purpose, and incentivize client retention and satisfaction. We have systems that provide early warning mechanisms on client detriment, including in-house client protection panels and a whistleblowing policy. Achieving that alignment has to be balanced with business viability. That is being done by issuing clear guidelines on what it means to put customers first in daily activities. We believe that if you fix the culture, the numbers will follow: the two are complementary, not competing. This approach is a significant advance on having mission statements and values pinned on all the noticeboards. A Norwegian asset manager “Unlike cars and computers, our funds don’t have predictable outcomes. A trusted brand is essential to assure clients that we can deliver.” “A strong culture can be an asset, especially as the next generation of investors is likely to want values-based funds.” Interview Quotes