LET’S LEARN QUALITY CONTROL FROM MANUFACTURING
I’ve gone on record before saying quality is never an accident. It’s always because of careful processes designed to monitor, review and cross-check.
It is the role of management to make sure that services are being delivered with quality across all touch points. Managers and business leaders need to be hands-on in overseeing recommendations made by financial advisers, studying suitability reports, re-checking investment allocations and monitoring on-going results.
It’s very interesting to me that manufacturing can be streets ahead of advisory firms and providers when it comes to quality control. But in fact, quality is perhaps even more important in the world of financial advisory than manufacturing.
Let’s say you’re looking at a plant that makes widgets, and all widgets must be 3 centimetres across and perfectly round. But here’s my rather biased opinion: in a world where a million widgets are being produced every hour, a couple not measuring up is not going to be catastrophic. That’s why manufacturing has an acceptable defect rate.
Now, this might be okay in a world that works on volume. But an acceptable defect rate shouldn’t exist in international financial advisory and wealth management. Why? Well, to state the obvious, people aren’t widgets. You can always replace widgets, but most financial clients have only one set of life savings.
The rate of imprecision, mistakes and defects in the international financial advisory industry should be far stricter than in manufacturing. In fact, it should be zero.
This is changing, and rightfully so. Clients, regulators and shareholders are all becoming less forgiving of imprecision. Mistakes are counted, recorded and people and brands are held to account.
In such an evolving industry, we really need to take another look at quality control. We can take some cues from manufacturing — where there are two sets of checks and balances. Some are automated. Others rely on human expertise.
Let’s bring that two-tiered model to the international financial services industry. We’re doing that at swissglobal. A first layer of quality is provided by digitalisation and automation. We’re implementing significant capability around our CRM systems where advisers and their support infrastructure are tasked with gathering the right data and adding to the system. Missing pieces are flagged. Therefore formalising the process of allocation and recommendation. All advice is complied in a sustainability report that is sent to technical supervision for review and approval.
Then there’s the human oversight, this is key. All senior team members, are and should be tasked with a collaborative reviewing process with all other team members.
I’m going to sign off with one last thought. Many of us pride ourselves on being responsive. But quality control isn’t about responding after the fact. It’s making sure that errors don’t creep in to begin with. Prevention, not rectification, is where we need to head as an industry. And it all begins with putting the right processes in place, and following them stringently.
Wealth management is an industry that if done right can have a tremendously positive impact on people’s lives by helping them achieve financial security.
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Blog published by Mike Coady
