When money management executives discuss the challenges they face, most talk about increasing market share, expanding their non-U.S. business and thriving in a compliance-heavy environment.
What they should be talking about is developing the next generation of leaders, asserts Jane B. Marcus, managing partner of the global asset and wealth management practice at executive recruiter Heidrick & Struggles, who is based in Chicago.
Ms. Marcus is passionate about this subject, so much so that she teamed with Terry R. Bacon to interview a host of CEOs at money management firms and to compile a white paper on the topic. Mr. Bacon is chief executive officer and president of Lore International Institute, a corporate education and professional development firm in Durango, Colo.
Many of the CEOs are people with whom Ms. Marcus has had long-term, professional relationships.
"I've been wanting to do this for three to four years. Having been a recruiter in this business for now going into my 20th year, I've been disappointed and frustrated by the lack of leadership," she said.
Ms. Marcus said she chose to undertake the project with Mr. Bacon because he provided an academic perspective.
Naturally, she began with certain expectations. "I guess there was a part of me ... that wanted a road map ... I wanted to have these conversations (with CEOs) and come out with ‘Aha! Here's the model. Here's what we should do.'
"The heavens would part, and this is how we're going to get leadership."
Were those expectations met?
The short answer is no. "What I did find is there is no conclusion. We don't know what we should do. We don't know how to bring in the right skills."
She noted there is much more attention to leadership development in other industries. Maybe that's because the industries themselves are older, she mused, but added: "We're still acting like a cottage industry."
"It's not valued," Ms. Marcus said. "There's no respect for leadership in asset management. Where do you get the most leadership and pay? You get that by running the product ... The best and the brightest in the industry have not been encouraged to run the industry ... they've been encouraged to run the money."
Ms. Marcus mentioned several money management executives named by those she interviewed as leaders they admired. Among them: Edward C. "Ned" Johnson, chairman and CEO of Fidelity Investments; John Brennan, chairman and CEO at The Vanguard Group Inc.; James S. Riepe, vice chairman of T. Rowe Price Associates Inc.; and the executive team at Capital Group.
But when she asked herself, "Are those the leadership skills that would necessarily work in the future," the answer was, "I don't think so." In Capital's case, for example, the group leadership that built the firm is simply not repeatable, Ms. Marcus explained.
When asked to name the next generation of leaders, people who perhaps had recently taken the helm of a money management firm, Ms. Marcus could come up with only one name: Martin L. Flanagan, who in July was named CEO and president of AMVESCAP PLC.
The fact that no other names came to mind proves her point.
As for the response she's gotten to the white paper, it's telling that "the people who called were the 40-year-olds" who are part of the next generation. She didn't get much feedback from those in their 50s, the people sitting in the chairs of leadership.
Ms. Marcus said it's imperative to "get people interested in the subject," perhaps through roundtables attended by both today's and tomorrow's leaders. She admits she's not sure how to remedy the situation, how to ensure the next generation of money management executives is properly trained - whatever that is.
"I guess we just keep talking about it for now," she said.