You work in an industry rife with tech disruption, regulatory impediments, intense competition and complex products. Meeting these challenges requires various skills, but the most important one is arguably leadership.
Brené Brown, a research professor at the University of Houston, asked various C-suite leaders what was needed for success in a complex world with intractable challenges and an insatiable demand for innovation. The response across the board: braver leaders and more courageous cultures.
In her book Dare to Lead, Brown defines a leader as anyone who recognizes the potential in ideas and people, and has the courage to develop that potential. In the advisory
world, a leader could thus be described as any advisor who embraces ideas that are based in evidence and courageously incorporates them into their advice, with resulting positive client outcomes.
Unfortunately, such leaders are few and far between. In STANDUP to the Financial Services Industry: A Practical Guide for Canadians, John De Goey, a portfolio manager at Wellington-Altus Private Wealth in Toronto, warns clients about advisors who don’t use evidence to inform their practices. Advisor bias and misguided beliefs persist, resulting in poor advice with potentially dire client consequences.
Examples of bias include advisors’ tendency to favour costly, actively managed funds for both clients and themselves despite poor returns. Misguided beliefs include past performance being a reliable metric for fund selection (it’s not) and the irrelevance of costs (they’re relevant).
Advisors who recognize their biases and misbeliefs, and want to incorporate established research into their advice, face a difficult path. Speaking the truth can be bad for your career, De Goey writes. Advisors must “avoid run-ins with regulators, product suppliers and employers. If those folks have a certain viewpoint, it’s likely just easier to go about your business by not saying anything that contradicts it.”
In other words, it’s easier not to let yourself be vulnerable.
In her book, Brown recalls telling a group of U.K. bankers, many of whom had tried to stand up for certain values, that no single act at work requires more vulnerability than holding people to ethical standards. “People will put you down, question your intentions, hate you and sometimes discredit you in the process of protecting themselves,” she writes.
Vulnerability, she says, is having the courage to show up when you can’t control the outcome and not walking away from situations that make you feel uncertain or exposed. That means being open to learning when confronted with challenging information.
Being vulnerable can help advisors understand where they add value, instead of hustling for their worth. When we don’t understand our value, “we often exaggerate our importance in ways that are not helpful,” Brown says. “We put more value on being right than on getting it right.”
For advisors ready to get it right, De Goey’s book offers seven steps for implementation, including embracing empirical evidence, standing up to detractors and making amends to clients for poor advice.
For advisors not ready for the career risks that may come with rocking the boat, a willingness to sit with vulnerability as you assess De Goey’s assertions is a commendable first step.
Michelle Schriver is assistant editor of Advisor’s Edge. Email her at email@example.com.