Recently, I gave the opening keynote at the AMP Hillross annual convention, with the title of Embracing the Future.
Hillross, one of the most upmarket of the wealth management networks, is seeking to lead the rest of the market by shifting to a pure fee-for-advice model, and rapidly developing a true professional culture. My keynote was designed to bring home the necessity of individual and firm leadership at this key juncture in industry structure.
One of the central themes of my presentation was the increasing importance of reputation for professionals. I wrote about this critical idea on his blog:
Clearly reputation has always been critical for any professional, and there are some parts of professional services markets where reputation is already highly visible, such as prominent M&A lawyers, who are identified by numerous client surveys. While clients of other professional services (for example audit or management consulting) tend to be more focused on engaging firms rather than individuals, there is a fundamental shift from corporate to individual reputation under way.
What is changing is the extraordinary visibility of people’s actions and character and how others perceive them. One of the most valuable functions of the emerging ‘global brain’ that connects our insights is to make reputation more visible. For over a decade people have talked about how the internet is lowering transaction costs. Still today, the biggest single cost of business transactions is assessing the reputation of your potential business partner. Easier assessment of the reputation of suppliers will have a significant impact on the global economy.
Many professionals will be greatly impacted by these shifts. The search for professional advice is often still highly unstructured, based on anecdotal recommendations or simple searches. As importantly, clients of large professional firms may start to be more selective on who they wish to work with at the firm, creating a more streamlined meritocracy.
The mechanisms for measuring professional reputation are still very crude, yet over the coming decade we can expect to see substantial changes in how professionals are found. This will impact many facets of the industry.