The importance of leadership

09 September 2020

Money & Life team

Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.

2020 has been a year of extraordinary change, highlighting how important it is for our leaders to keep people calm and informed. Four financial planners share their thoughts on what we look for in leadership during these uncertain times.

Clear communication and decisive action are essential during times of crisis. Whether they’re hearing from financial planners or public health experts, people want the facts and to know leaders understand what they’re going through.

 

Ben Hatcher, CFP®

Principal Financial Adviser, Tailor-Made Financial Services

Do you think we are looking more to experts for leadership during the COVID-19 crisis?

Absolutely. We are certainly relying on health experts to provide guidance and quality information. Given the rapidly changing world, we are being forced to rely on our political leaders to make quick and hopefully, the right decisions.

I know our clients have looked to us for guidance on the financial impacts. We have trialed webinars for the first time, when the markets were in turmoil and the uptake was very pleasing.

Sometimes though, the media make it very difficult to ascertain who the real experts are (so many people from obscure Institutes being wheeled into TV interviews).

What qualities do you think leaders need to help people stay calm and take positive actions during a crisis?

I think clear, consistent and honest communication from leaders is imperative to show empathy for those in stress and need, and to keep people informed.

Leaders who have empowered people by delegating and trusting has been a very positive upshot of the current crisis. Those who showed initial leadership with technology,  work from home and other flexible arrangements is a classic example of “loss of control” for employers but has really been a wonderful opportunity, that can lead to increased productivity and job satisfaction.

With so much uncertainty about the Australian and global economy, is it now more important to seek professional advice on your finances?

Being a Financial Planner, the answer is a most definitive yes! But, in all seriousness, I would say getting quality information about so many aspects of life at the moment (health, ever changing travel restrictions, dealing with mental stress etc.) is critical.  Uncertainty creates much emotion, and thus getting professional advice on finances before making any big decisions is really important in the current environment.

 

Susie Erratt, CFP®

Financial Planner, Advanced Financial Planning Solutions

Do you think we are looking more to experts for leadership during the COVID-19 crisis?

In times of crisis we often look to established experts. Recently, in the case of the bushfires most of us can recall Shane Fitzsimmons from NSW Rural Fire Service or Professor Brendan Murphy the Chief Medical Officer. We take comfort that they are experts in their fields and whilst employed by the government we expect them to be apolitical.

What qualities do you think leaders need to help people stay calm and take positive actions during a crisis?

Good leaders can do that. They must be able to listen, process and articulate their vision. However, equally they must be able to take their audience with them. It doesn’t matter how good or clear their vision is if no one believes them or wants to accompany them on the journey. Authenticity is critical. You will not get it right every time, and neither should you, as this would indicate that new information is not being factored in. It is, however, important to acknowledge mistakes. People are far more forgiving when people own their errors or misguidance than when they blindly plough on and hope no one will notice.

With so much uncertainty about the Australian and global economy, is it now more important to seek professional advice on your finances?

It the current world of geopolitical uncertainty, coupled with a pandemic, it is more important than ever to listen to and take advice. It is hard enough for professionals to come to consensus on some things and they have all the information in front of them. A case in point this week was Afterpay. The share price was $72.50. One broking house had a sell on it at $27 fair value and another had a buy on it with fair value $101.

Due to the pandemic people are more emotional about their finances than ever. Frequently this is a bad thing. It is very important for our economic leaders to be clear and calm about what is happening, and while focusing on the positives, it should not be sugar coated. Not delivering too many messages at once is vital and politicians in particular have been very careful to clearly articulate the key message of the day. Similarly, with economists. They are constantly reminding us that investing is a long term strategy and the basics of the Australian economy are strong. If you are unsure seek advice.

Your peace of mind is as important as your bank balance.

 

Martin Webb, CFP®

Director, Graham Financial Pty Ltd

Do you think we are looking more to experts for leadership during the COVID-19 crisis?

I believe we are being presented with more experts.  Both State and Federal leaders have consistently deferred to “experts” to explain what COVID-19 is and how we can best reduce the risk of catching and spreading the virus.

The fear and uncertainty created by the pandemic has provided an environment where the community has perhaps been more willing to accept an “expert” view.  This approach has put enormous pressure on our elected leaders to limit questions of experts that can be answered within their expertise.  Medical expertise will have opinions on saving lives but perhaps less conviction on saving the economy.

Do you think we are looking more to experts for leadership during the COVID-19 crisis? 

The self-awareness that they do not have all the answers and the confidence to accept that this is okay.  Leadership requires intellectual humility – a deep understanding of limitations and personal biases.

A good leader will know that they will be forced to make decisions in an environment that is uncertain.  To quote “no amount of sophistication is going to allay the fact that all of your knowledge is about the past and all your decisions are about the future” (Ian E Wilson)

Leaders will demonstrate the confidence to seek views that challenge the status quo and the courage to change their mind when the situation changes around them – because it will.

With so much uncertainty about the Australian and global economy, is it now more important to seek professional advice on your finances?

I can accept that COVID-19 has raised anxiety but not uncertainty.  Is today’s future really anymore (or less) uncertain than at other points in the past … when we looked into the future?

The global economy is an infinitely complicated web of interconnections that is constantly changing.  We need to accept that the only certainty is uncertainty.  If we are to learn from the past, we should recognise that financial security is destroyed by poor decisions.  History shows poor decision happen all the time.

If professional advice protects you from poor decisions, then you should seek it all the time.

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