Culture is pivotal because it plays a key role in determining how firms make decisions to achieve their business objectives. Culture is at the heart of competitive advantage today; this is particularly the case for investment firms where people and their judgments are the chief assets. A firm’s culture creates the context and incentive structure to support an investment process based on a longer time horizon, a collaborative team approach that can integrate diverse insights and robust risk management. Culture also underpins business decisions, including talent management, strategy and capacity management. A strong culture in investment management firms is a requirement for sustainable alpha-generation.
Many established, successful financial advisory firms are run by baby boomers, who have leveraged their philosophies on client relationship-building and creating a long-term vision for the firm. At the same time, many of those same firms are populated by millennials, who grew up in a fast-paced, digital era and excited about bringing new ideas and methods into the business.
These two perspectives are often separated by more than chronological age and years in the business. Both boomers and millennials bring unique skills and experiences to the table, but their approaches to the business can at times seem as different as night and day..