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I’m reading an important new book.I hesitate to call anything a “must read” for financial advisors, but this comes pretty darn close.
“Stewardship: Lessons Learned from the Lost Culture of Wall Street” by John Taft, the CEO of RBC Wealth Management-US, and the great-grandson of the 27th president of the United States, William Howard Taft, who is pictured here.
This is a compact, but wide-ranging book. Taft covers topics as diverse as: what led to the financial crisis of 2008, how to make the financial system stronger, the new fiduciary rules, what individual investors might do to prepare for the next financial crisis, and the promise of Environmental, Social and Governance (ESG) investing.
But the heart of the book is his discussion of core principles and stewardship, and what happens when stewardship values prevail, and what happens when they don’t.
As Taft points out, stewardship has many different definitions, including:
- “The choice of service.”
- “To hold something in trust for another.”
- “The careful and responsible management of something entrusted to one’s care.”
- “Accepting accountability for the impact of one’s actions, the impact of the organization one is leading and the impact of the industry one belongs to, on the larger community.”
Within each of these definitions, are five key attributes:
Purposefulness. The chief attribute of stewardship, of servant leadership, is a strong sense of purpose. It is a capacity -- call it purposefulness -- to remain focused on and true to that sense of purpose.
Humility. If stewardship is the choice to serve others, it strongly implies that one does so with a pervading sense of humility. Humility in stewardship strongly suggests images of service.
Accountability. Accountability means being aware of and assuming responsibility for the effect our actions have on others, with others defined as broadly as possible.
Foresight. Taft states that foresight is the central ethic of leadership if we are to effectively manage organizations for the benefit of their constituents, as well as the ability to consider outcomes in advance of decision-making. Here he evokes the seventh-generation thinking of the Iroquois Nation that admonishes us to “look and listen for the welfare of the whole people and have always in view not only the present but the coming generations…the unborn of the future Nation.”
Integrity. In the words of John C. Bogle, “If you do not have integrity, no one will trust you, nor should they.”
At this point, I am paraphrasing much of Taft’s wisdom, observation, and insights. For those financial advisors who view stewardship as part of your core vision and values, I urge you to read them directly.
Some closing thoughts for financial advisors:
- What are your core principles?
- How do you define stewardship as it relates to your practice?
- How do you apply the chief attributes of stewardship, i.e. purposefulness, humility, accountability, foresight, and integrity, as you serve your clients?
- How might attention to stewardship and service contribute to the growth and profitability of your practice?
All the best!
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Topics: Leadership
