NEW YORK—The financial services industry might want to take a cue from Domino’s Pizza before declaring “mission accomplished” on the economic crisis.

Sally Krawcheck, president of Bank of America’s global wealth and investment management unit, said during her keynote address Thursday at the Securities Industry and Financial Markets Association private client conference that the attitude that what happened in the financial industry is “not our fault” won’t do the industry any good.

Only by looking at the mistakes of the past and doing better next time will the industry repair the damage done, Krawcheck said. This includes accepting pending regulatory reform: “We have a real problem in the eyes of our clients and the public.”

She used the example of Domino’s, which had lost its allure since the 1980’s. Focus groups told the company that their pizza was boring and bland. Instead of hiding from the criticism Domino’s took it head on. “We, too, should face our criticism head on,” she said. “We are a client service business. We need to give clients what they want, which is ‘listen to me, do right by me and fight for me.’”

Krawcheck said executives from Merrill Lynch, a unit of Bank of America, have taken a lesson from Domino’s playbook and are traveling the country doing focus groups with clients.

What they have learned through these focus groups is that although those in the financial industry focus on investment performance, clients say that the trustworthiness of advisers is their top priority. Clients also want advisers to charge a fair price for services, to be upfront and keep them informed.

The key is not to assume what clients want, Krawcheck said.

All Comes Down to People, Technology

At the end of the day, she said, the financial services industry offers a unique value to clients. The winning components of this value proposition are people and technology.

“Hopefully the events of 2008 taught us lessons we won’t forget,” she said. “If we have short attention spans, we are in the wrong business.”

Krawcheck said everyone wants to believe the financial crisis is over because “if we squint, the world almost looks back to normal,” but there is a long climb ahead.

The media keeps calling it a “muted upturn,” said Krawcheck, who joined BoA last year, “But it looks like an un-muted upturn.”

“New realities are staring us in the face, and tectonic shifts are taking place,” in the economy, in terms of regulation, demographically, and in the financial markets.

Krawcheck, who was formerly CEO of Sanford C. Bernstein & Co. and a senior executive at Citigroup, said that the United States is being questioned financially and as a global leader.

This year, she said, 70 cents of every dollar of new growth will come from emerging markets. Only 16 cents will come from the United States. As early as 2030, Asia-Pacific will have more high-net-worth clients than the United States, she said.

“People are worried, and the anxiety is palpable,” she added.

Redefine Retirement

One of the ways to ease investor concern, Krawcheck suggested, is for the industry to redefine retirement.

With 76 million Baby Boomers heading into retirement there are many worries over the fact that people are living longer and whether they will have enough money to last the rest of their lives. Yet financial advisers are speaking a different language than clients, sprinkling their conversations with “jargon” that clients do not understand.

When an adviser says, “managed account,” she said, often clients don’t know what they are talking about and their eyes glaze over. Customers’ ideas of what they need are very different than what advisers feel the client  needs.

Another piece of advice: don't only focus on the Baby Boomers, but younger clients as well.

And although men have felt the economic pain of the last 18 months, “it is acutely felt by women.”

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