At the end of March, I am setting off on a new adventure—retirement. It’s a subject I know something about, having spent almost all my 40-year career in the retirement services industry. Now I’m looking forward to exploring my own.
I would like to take this opportunity to share a few ideas about what I have learned about successful financial service organizations.
The financial services and retirement plan industries are experiencing tremendous change, and with that change comes great opportunity. Business models and philosophies are shifting rapidly. Some organizations are leading, many are following, and some are being left behind.
During periods of intense change, it can be easy to lose sight of the essential underpinnings of successful corporations. For an organization to keep pace and make gains today and in the future, its leaders will need to keep an eye on the drivers of success.
Purpose
Some organizations consider “purpose” to be a nice statement that boosts morale while emphasizing shared values and a commitment to the community. Purpose is much bigger today. Most importantly, organizations must align behind a new purpose, one that creates opportunities to reshape their company’s value proposition.
Today, we are seeing the power of purpose as retirement plan recordkeepers redefine themselves as financial wellness providers. We also see it when financial advisory firms transform from investment managers to financial life planners. Purpose can redefine companies and create opportunities to expand influence and add value.
Value creation
Disproven theories about value creation are thick on the ground. No matter which guides your organization, success depends on the careful selection of financial goals and measurements. Once you know what you’re pursuing, it must be thoroughly and repeatedly communicated and periodically updated so that management systems, processes, and incentives align with the goals and mission of your organization.
In the retirement industry, we have seen consolidation that abruptly transforms recordkeeping value and the need for scale. It’s likely that a small number of recordkeepers will dominate the industry in the years to come, serving as financial gateways that support Americans in all aspects of their financial lives.
It’s also possible that scale and user experience improvements will open doors to new competition, like Google, Apple or Amazon.
Stay on top of trends, keeping your organization’s values in mind and aligned.
Products and service innovation
Today, innovation is central to success. We are living in a period of continuous economic disruption. Technological advances, regulatory changes, and client expectations are creating opportunities and challenges.
To grow, organizations must identify opportunities and innovate without abandoning what is already working well. Today, companies must simplify the complex, prioritize the most meaningful opportunities and create scalability.
Execution matters. Organizations must build strong processes that are repeatable and consistent with client needs today and tomorrow.
Trust and loyalty
In a highly competitive and rapidly changing marketplace, partnerships that are grounded in trust and foster loyalty require a deep understanding of the client’s needs and responsiveness to those needs. In every industry, clients want quality products, great prices, and exceptional service. That is the baseline. Earning trust and loyalty means finding ways to add real value within reasonable time frames.
Leadership and people
Leadership is and always will be critical. Leaders must recognize and weigh goals and risks. In our competitive and rapidly changing industry, successful organizations are led by people who have a clear understanding of risk, yet do not let risk thinking prevent them from passionately pursuing their goals. As Henry Ford said, “Don’t find the fault, find the remedy.”
And a leader needs people to execute. People matter and they thrive with the right leadership and in the right environment. Ideally, organizations have employees who are engaged, confident, passionate, reliable, and competitive.
A list of potentially valuable traits is enormous. Others would be problem-solvers and action-oriented. While individual skillsets are critical, organizations need to build teams with complementary talents and strengths. Few employees are good at everything. Having the right team makes it possible to make a difference on a consistent basis.
Corporate culture
Corporate culture reflects the values, beliefs, and standards that are shared by members of an organization. Culture is foundational to every company’s success and it is reflected in the actions of employees. Building and sustaining a vibrant corporate culture is neither simple nor straightforward, but it can impact an organization’s bottom line.
For example, many companies in the financial services industry default to competition-based cultures. While internal competition can increase company value, it can also lead to instances of excessive risk-taking. You don’t have to look very far to find examples. Corporate culture deserves careful thought and development.
Looking backward, but mostly looking forward, these are the drivers of success. They work in synergy to create a whole that is greater than the sum of its parts. Obviously, success will look quite different from firm to firm, just as retirement situations look quite different from person to person.
Resist the temptation to allow success to become your seat cushion. Success cannot be rested upon. Staying relevant in a constantly changing marketplace is an ongoing challenge. Today’s successes will not be tomorrow’s.
As for me, I am very grateful for my incredible experience at Millennium Trust. Thanks for reading, and I wish you success always.
Terry Dunne is senior vice president and managing director of Retirement Services at Millennium Trust Company, LLC. Mr. Dunne has over 40 years of consulting experience in the financial services industry. He has written extensively on retirement planning, industry trends, technology, and legislation. Millennium Trust performs the duties of a directed custodian, and as such does not sell investments or provide investment, legal or tax advice.
Before retirement, Terry Dunne was the senior vice president and managing director of Retirement Services at Millennium Trust Company, LLC. Mr. Dunne has over 40 years of consulting experience in the financial services industry. He has written extensively on retirement planning, industry trends, technology, and legislation. Millennium Trust performs the duties of a directed custodian, and as such does not sell investments or provide investment, legal or tax advice.
