Only Leadership Will Restore Trust on Wall Street
by Rick Ferri
The public's opinion of Wall Street and the financial services industry is at an all-time low. Reputations have been tarnished by repeated scandals, bankruptcies, bailouts and bad executive behavior. This perception will not change with more government regulation because the problem is not one of process, it's one of leadership.
Today, there's a severe shortage of fiduciary leaders in the financial services industry. Trust was broken down because management has placed more emphasis on building shareholder value than building client confidence and loyalty. The only way trust will be restored is with leaders who uphold strong fiduciary principles both inside and outside the industry.
What's needed is a fiduciary leadership program for financial stewards. This program would guide the industry back toward a culture of trust — where client's needs come first and where actions by caring managers and executives inspire others in the industry to do the same. Learning to lead and leading to serve is in the best long-term interest of all participants: clients, employees and stakeholders.
Our nation's military academies immediately come to mind when we speak of leadership. Military training has shaped many of our nation's greatest leaders for jobs both on and off the battlefield. There is no question that instilling a military doctrine in a financial service firm can create an efficient and trusting organization. I know firsthand because I am a retired Marine Corps officer and founder of the investment firm Portfolios Solutions®.
I was excited when Academy Leadership decided to partner with 3Ethos and offer the first leadership training program for investment fiduciaries. It was a natural fit. Academy Leadership was founded by Annapolis and West Point graduates who also have long records of success in both the military and private business sector. 3Ethos was founded in 2008 by Don Trone who has been writing and teaching about fiduciary responsibility for more than twenty-five years.
The inaugural Leadership Boot Camp for Investment Stewards was hosted by the Coast Guard Academy in New London, Connecticut. I was pleased to be in the first class of 30 candidates. The three-day program was taught by fiduciary expert Don Trone and leadership expert Perry Martini. Both men are military academy graduates and was president of his respective class. Rear Admiral Robert Duncan was a keynote speaker on the first day. He is a retired Coast Guard officer who oversaw post-Katrina operations on the Gulf Coast during 2005.
My high expectations for the boot camp were met in every respect. Trone and Martini eloquently blended the three roles of leadership, stewardship and fiduciary into one inseparable force.
In the eyes of clients, we are leaders first and are financial experts second. This is particularly true during a crisis when clients need leadership more than they need facts or figures. Martini linked this idea to a moving story about his father's advice on the day he took command of a Navy P-3 squadron. "Perry," he said in his native Italian tongue, "they don't care what you know, than just want to know that you care."
Our class of 30 candidates was completely engaged during the entire three-day course. We leaned many things about our inner strengths and weaknesses, and how these different forces affected our ability to lead others. It was an invaluable lesson in group dynamics.
Candidates came to the academy from all corners of the financial services industry and we left as one unifying force for fiduciary duty. Our final assignment was to select the class motto. We chose, "Learn to Lead — Lead to Serve." Good words for the financial industry to adopt and live by.