David MacDonald of macsimize explains the role and value of training in helping wealth managers in Asia adopt a more holistic approach and provide more client-centric, needs-based advice.
Date: Oct 2010
Many organisations in Asia’s wealth management industry are trying to move towards an advice-based approach, said David MacDonald in an interview. They want to be seen by both their clients and the market in general as institutions which provide advice – not just sell product.
Moving to that level, however, needs to start with their advisers having a mindset where they are passionate about delivering advice, rather than only being involved in transactions, he said. They should want to apply their market and asset-class knowledge in a more holistic way.
If their employers are going to help them achieve that, then a lot more emphasis needs to be put on structured skills development, explained MacDonald.
And this change in behaviour takes time – probably a lot more time than it takes to acquire technical knowledge. Plus, it is a challenging thing to do, given that it is often easier to revert to old practices rather than trying to act in a different way.
For example, said MacDonald, for advisers to embed new skills and practices, they need reinforcement training. Someone on the job also needs to provide feedback to the advisers on how they are performing, and further support mechanisms need to be available.
However, he added, very often firms lack the mechanisms to tangibly assess the effectiveness of individuals when they apply their new skills.
The common way to measure an individual’s success in wealth management is their level of assets under management or the fee income they generate from their client portfolio, he explained. Yet that isn’t always a direct reflection of the way they are applying their skills to the job.
Making advice relevant to Asia
According to MacDonald, while the buying and portfolio management behaviour of Asian clients is different from individuals in other parts of the world, it might well be the case that those people adopt a different approach because they have learnt to appreciate the value of advice.
There might therefore be an opportunity over time, he suggested, for advisers and organisations to re-educate clients and encourage change behaviours, especially in the wake of the financial crisis.
Because Asian clients haven’t been in the market for advice, they probably didn’t seek any during the crisis, he explained, and instead just made decisions that perhaps they shouldn’t have.
MacDonald said he hopes that based on the fallout since the crisis, not only should banks be looking to change their approach, but clients should be looking to change the way they engage their bankers, too.
This means a desire for impartial, client-centric, needs-based advice.
More innovative approaches to training
Getting to this stage, however, is a challenge for wealth management firms.
Although the banking industry is renowned for delivering innovation in terms of its products and processes, MacDonald said it lacks the same reputation for its approach to training and development.
In many industries, not just banking, companies which want to see whether their training is robust look first internally, and then at some of their direct competitors and at what they might be doing which can be incorporated.
As a result, MacDonald said wealth management organisations should instead look for inspiration outside of their own industries, and towards industries where what people do is considered to be more of a profession than a job.
They should look at how these companies approach the continuous development of the people who work in their business, he explained, as well as at how those people pride themselves on being continuously developed to raise their own standards.