Wealth Management and Private Banking

Wealth Management and Private Banking


Expert: Chris Fisher at Multrees & Dr. Ben Shenoy at University of Surrey (Centre for the Digital Economy)

Moderator: Mark Miles - Scorpio Partnership

 Key message    

Dr. Ben Shenoy introduced the roundtable by posing the question ‘Why do we regulate everything?’ What ensued was a thought-provoking discussion questioning the several difficulties faced by firms when developing a corporate culture, and whether regulation too often constrains the creation of company-wide cultural values.


  • The wealth management industry needs to learn how to nurture an effective culture across a range of factors – they can do this by implementing change gradually, in line with Kotter’s ‘8 Step Process For Leading Change’
  • Behavioural analysis and the understanding of organisational psychology are essential to help better facilitate the knowledge share of corporate, cultural values.
  • The brain can be trained – employees crave recognition and inspiration. There is huge value in sharing the wider company’s vision and strategic focus.
  • Change needs to be propagated from the middle, but can also be easily derailed from the top – strong leadership needs to guide corporate culture.

Key themes 

Regulating culture

A major challenge facing wealth management firms today is the pace at which the regulatory environment is changing. Regulators have pushed for higher fiduciary standards and transparency, demanding that the industry keep up. But what has caused these regulatory pressures? Participants of the roundtable explained they believed that regulation is rooted in client protection, and a general lack of trust. In fact, regulation’s implicit philosophy highlights the industry’s lack of trust in people doing the right thing. Perhaps due to the fact that the money motive in financial services is so strong, strict guidelines are needed to help counteract such issues. As a result, corporate culture can force strict compliance and transparency to be adopted into companies’ behavioural norms.

Although hard to define and implement, executing on a strong culture is imperative for firms. And simply stating a firm has a strong culture does not equate it to embodying such values. Cultural change takes time.

In an attempt to reach more cohesive cultural shifts, businesses have often utilised performance management to help bring cultural clarity to employees, indicating what they need to do in order to be more successful at the firm. Yet although such evaluative frameworks aid in pinpointing specific areas for improvement, it is truly the ‘softer’, more subconscious social cues shaping work environments that teach employees about their company’s corporate culture.

Dr. Ben Shenoy advised delegates to look at companies mechanically, explaining that they consist of ‘organisational hardware’ and ‘organisational software’. Where ‘organisational hardware’ is made up of aspects such as the firm’s processes, metrics, incentives and job descriptions, ‘organisational software’ encompasses things like people’s attitudes at work, the dress-code, and what being ‘late to work’ means.

Although there must always be a balance, the true ‘control mechanisms’, as Dr. Ben Shenoy explained, stem mainly from the ‘organisational software’.

This ‘mechanical method’ theory is reflected in our brain’s processing of information. The back part of the brain deals with fast-thinking, whereas the front part of the brain relies more heavily on slower, rules-based judgment. The back brain is where habituated actions become automatic to allow for increased efficiency. The front part deals with new pieces of information. As a result, until corporate culture becomes ingrained in employees’ back brains, it can be moulded and consistently assisted in its development.

Corporate Culture: The hardware and software

Corporate culture is the amalgamation of vision, mission and constant reinforcement of values – but how can firms appropriately apply these operational, organisational and cultural goals? Change begins by painting a specific vision and communicating it to all employees effectively. Following this, a period of consensus building leads to personnel buying into the newly-imposed cultural direction. When people feel comfortable and confident in their company’s corporate culture, they will ultimately feel increasingly comfortable and confident at work.

This progression aligns with John Kotter’s ‘8 Step Process for Leading Change’ model where:

  1.     A sense of urgency for a cultural shift is created
  2.     Guiding coalition is built
  3.     Strategic visions and initiatives are formed
  4.     Supporting team members are enlisted
  5.     All barriers are removed, to facilitate enabling the proposed change
  6.     Short term wins are generated
  7.     Acceleration is sustained
  8.     The cultural change is ultimately implemented

Dr. Ben Shenoy explained that new hires are very concerned with trying to fit in upon joining a new firm, but as soon as the corporate culture becomes apparent, and they understand the environment surrounding them, the wider social control will mould their behaviour into aligning with the rest of the firm:

“We are massively affected by situations and those around us – our brain is smart, but lazy…”

This social behaviour links directly to the power of basic instincts. To highlight this point, a delegate shared an example describing how if the same amount of food is placed on a large plate and a small plate, people eating the food from the smaller plate will feel more full, simply because it appeared to be a bigger meal.

In the context of wealth management, introducing micro-performance management can be an effective way forward. If people get the chance to see how they are performing in terms of assets and numbers of complaints in comparison to their colleagues, they tend to push themselves to out-perform. This drives motivation as they do not want to be visibly seen as doing badly.

The lesson here? We can train the brain. The front brain craves recognition, and wants to be inspired. There is, therefore, value to sharing the company visions. Employees want to know why they are doing what they are doing. They crave meaning.

A word of caution however - although people are often flexible and open to adaptation in order to fit their surrounding environments, will power is finite. As a result, firms should provide a clearly defined ethos and specific metrics to make it as easy as possible for employees to embrace the cultural values, and achieve their desired success. 

Culture comes from the inside-out

Regulation trickles into corporate culture in a number of ways, and ultimately can utilise its integration into culture as a control mechanism working from the inside of the business. For example, implementing increased transparency needs to start from the middle of the business. With a certain degree of latitude, people notice and begin to replicate. Transparency then can soon become part of the normalised firm behaviour.

Once employees see the benefits reaped from abiding by regulation and transparency, productivity and communication flourish. With transparency comes openness, and if employees feel empowered to make changes, the company can succeed. As one delegate put it:

“Many firms use cultural values as a clutch – getting a feel for what is right to implement, and when.”

However, as much as corporate cultural change can be propagated from the middle, it can also be easily derailed from the top (for example, if senior managers are not seen as getting their hands dirty in CSR initiatives). This is where leadership must play a crucial role in guiding the cultural direction. In other words, all hands must be on deck!


Although regulation can often appear to be a daunting, looming and imposed strategic change, firms need to re-analyse how to deal with it appropriately, which can in itself become a demonstration of a strong, robust and reactive culture. 

Companies must realise that culture can be used as a regulatory control mechanism, but they need to learn how to grow it from the inside out, and even more importantly, facilitate it from the top-down.