Why advice needs leadership in uncertain times

Alex Burke,  Senior Writer,  No More Practice Education

One of Annick Donat’s first moves when taking the reins at Madison Financial Group was to focus on cultural and value alignment with several core tenets: belief in advice and its value, engagement with the community, passion and willingness to learn, standards of professionalism and an entrepreneurial spirit.  

What this meant, in practice, was an audit of Madison’s adviser stable to determine cultural alignment, engagement with the community, compliance records and a history of “putting others first.” These ideas have also factored into the recruitment process: one of the first questions an applicant will be asked is why they believe in advice. 

“You’ll sometimes hear things that people think you want to hear,” Donat says, “but I think the answer reveals a lot about them.”

For example, some of Donat’s favourite answers include an adviser who developed a savings plan to buy a chocolate bar at the corner store as a child; another young adviser, Rachael O’Connor, was gifted Vivienne James’s The Woman’s Money Book when she asked for a share portfolio as her 11th birthday present, and was transformed by it. (She was since delighted to find that James is a part of the Madison community.) 

According to Donat, the above goes some way to both explaining how Madison operates and also the reasons for its success. “The standard you walk by,” she says, “is the standard you accept.” 

She also thinks it’s this proactive approach to fostering this kind of culture – one where, she adds, “no one is ever afraid to ask for help” – that has precipitated the near-innumerable expressions of support she’s received while Madison has been transitioning out of ownership by Sargon Capital, which has entered voluntary administration. 

“I’m a big believer in the law of reciprocity,” she says. “CEOs in the industry, colleagues, personal friends – so many have reached out to me during this period to ask how I’m doing and what they can do to help. Working with OneVue over the transition process has been incredibly helpful, too, because our organisations share a culture of transparency and open communication. We work together. And you pay it forward.” 

Of course, Madison’s current situation occurs in the midst of wider and more far-reaching changes for the entire advice industry. Whether it’s FASEA, the Royal Commission or economic challenges, advisers on the whole have been struggling to keep up with the pace of change – but Donat believes Madison is well-placed to navigate what’s already here and what’s yet to come. 

“I think one of the biggest things that’s needed in advice is leadership and direction,” she says. “There’s so much going on at the moment – regulatory change, investment markets going down, even historical things like the look-backs and reviews – that a lot of people don’t know where to turn.”

While the idea of decision paralysis during difficult times is understandable, Donat believes what’s needed right now is for leaders to step forward.

“You’re never going to get everything right,” she says, “but that’s why I ask a lot of questions. That’s why everyone in the Madison community asks questions. I believe that if you’re the smartest person in the room, you’re in the wrong room. So I like to observe, read and understand, and that’s what informs the decision-making process.” 

That ability to ask questions is also why Donat thinks Madison has kept pace with so many regulatory changes – even, in some cases, anticipating them before they come to pass. “The information is out there,” she says. “You just need to find it. You need to be curious. There have always been regulatory guides out there, for instance, that give you an idea of where the law is going to go.

“You can’t be in denial about change, either. I’ve gone through multiple market corrections and regulatory changes now – it’s not like I woke up to a whole new regulatory environment one day. These things have been happening since the beginning of advice. Change is always going to happen, and you need to be prepared.” 

She adds that as difficult as some changes may be, there’s often a silver lining: “I personally believe that the introduction of the Code of Ethics and FASEA has been a great gift to advisers. It’s a fundamental clarification of the true role of the adviser, and the adviser’s real relationship: that is, with their clients. It can only be a good thing that that is now enshrined in law.” 

It’s also timely, because Donat believes the general population is only going to become more advice-inclined over time. And this primarily has to do with the volume of information now available at people’s fingertips. 

“People are going to want more information,” she says, “because they’re more acutely aware than ever of where their money goes. You can see your money dynamically on your bank app, you can see what you’ve been spending it on, you can analyse that data and make decisions based on it – there’s so much out there, and that’s going to make people think.

“The more visible money becomes, the more questions people start to ask. It’s no longer a taboo discussion. And eventually, people are going to reach a point where they feel a bit out of their depth. At that point, where do you go? You go to those people with experience and wisdom. You start getting advice. It’s no different to medicine in many ways: Dr. Google can only get you so far. Eventually you’re going to go to a real doctor.” 

Because of this, Donat sees the future of advice as very bright. And she’s glad to be a part of it. “I mentioned people reaching out to me and wanting to pay it forward,” she says. “Well, that’s what I want to do. I believe in advice – I believe in supporting people. And that’s what we’re going to do.” 

The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here

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