Invest in financial services meetings in good and bad times

The strategic importance of bringing people together for face-to-face meetings has been well documented throughout the economy, but the industry that relies most on these personal gatherings may be the most surprising—financial professionals. Yes, a recent report by Oxford Economics for Meetings Mean Business (MMB) and Financial and Insurance Conference Professionals (FICP) concluded that during the 2008 downturn, the companies that rose above the financial challenges were the ones that relied on the power of people. “Companies that invested more in business travel during that period grew most quickly,” the report found.

Forget everything you thought you knew about what happens when financial investors get together with commercial real estate and insurance professionals for an annual conference. Beyond the earnings estimates on the PowerPoint slides, financial meetings are about developing relationships—with co-workers, potential business partners and each other. “Personal interactions lead to better outcomes,” was the message from executives interviewed for the report. They gain visibility, form new alliances, share best practices, learn new skills, get a jump start on tactics for complying with new regulations—and get business done.

In fact, the report went so far as to say, “The fate of the global economy rests in the hands of financial services leaders.” Following are three ways to ensure that the investment in bringing together the people who buoy the bottom line delivers maximum return on investment.

Lesson #1: When the Going Gets Tough, the Smart Keep Meeting On

That Oxford Economics study found that for every dollar companies invested in business travel during the recession, they made $9.50 in revenue and $2.90 in profit. The fact that this was true even at the lowest point in the economic cycle shows how important in-person encounters are to the bottom line.

Successful companies have long recognized this truth. Jim Weddle, managing partner of Edward Jones, said in a video featured on the MMB site that “meetings are an investment in the skills and knowledge of employees.” He has seen firsthand that without team meetings and incentive programs, productivity suffers. “It is an investment in the future success of our firm. And it is even more important in periods of business downturn,” he said.

Smart leaders know that the flip side of struggle is opportunity. Winning teams see the strategic advantage of filling the void left by competitors leaving the space, but then need motivated in-house talent to win new business and innovate products. That requires nurturing employees for long-term growth.

Recent advances in behavioral science have shown that rewarding employees with well-designed incentive programs maximizes motivation and increases sales by recognizing performance. Chris Dornfeld, chief operating officer with Maritz Motivation Solutions, suggests using social rewards that activate the “reward centers” in employee’s brains. That means instead of giving cash for hitting a sales goal, focus on public recognition, group outings—things that make people feel good about their position in the company.

He gives the example of a financial services provider who encouraged workers to issue at least five “recognitions” per week as part of a shift to a new services platform. The result was a 500 percent increase in adoption during the one-month trial. “Provide your employees with opportunities to do what they already want to do—connect with each other,” Dornfeld concludes. That is what retreats and incentive trips do best.

“Companies that maintain a strong presence at industry events, conferences and trade shows are best positioned to attract highly desirable job candidates,” the Oxford report said.

Lesson #2: Changing Regulations Mandate Continuing Education

Around the world, technological, market and regulatory changes are transforming practices in the financial and insurance sector more rapidly than at any point in history. From tax codes to block chain and consolidation, doing things the way they have always been done is no longer an option.

To stay current, practitioners have to continually update their skills, strategies and practices. Sitting down with experts, policy makers, business partners and remote colleagues is the best way to adapt to a whole new way of doing business. In person, employees from different areas of the business can ask questions, walk through processes and make connections that could help resolve future issues when the need arises—outcomes not always possible with online training.

The cost for not complying are also greater than they have ever been. Penalties for violating marketing restrictions in Europe’s General Data Protection Regulation laws can be as much as $23 million or 4 percent of a company’s annual revenue—whichever is larger. “In this high-stakes environment, compliance and documentation are crucial,” the report concluded.

Cathy Engelbert, CEO of Deloitte, says while the company’s offices are next-generation workplaces, featuring the latest in virtual meeting technology, bringing people together is how the company grows the skills of employees and collaborates to find solutions for clients. “Virtual meeting software isn’t as powerful and personable as meeting face to face,” she says.

Lesson #3: Consolidation and Remote Teams Demand Unity

When two companies come together in a merger, acquisition, hostile takeover, share swap or other transaction, the most essential factor in whether the deal will realize the benefits imagined in the eyes of the leaders is if the employees of the two organizations learn to work together. Nothing is more effective at orchestrating cultural change than face-to-face connections.

Even when the company has not coupled up, the increase in employees working remotely part- or full-time makes the times they come together even more precious. Nick Sargen, senior vice president and chief economist in the Cincinnati office of Fort Washington Investment Advisors, explained during a panel discussion at FICP 2017 Annual Conference that companywide meetings are essential to helping professionals at insurance firms stay on top of their organization’s strategic goals. His company holds a State of the Business Address in the first quarter of each year where the CEO and senior executives talk about how the business did in the prior year and set out the goals and objectives for the coming year. “This is the most important single meeting to understand what the firm is dealing with,” he said.

Whether it is annual check-in, new team building or a quarterly town hall gathering for a tech company with a distributed workforce, shaking hands is the quickest way to move people toward seeing eye to eye.

More Financial Meetings on Horizon

Each quarter, FICP, the professional organization for the financial and insurance professional industry, checks in with members to see what they are expecting for the coming months. For the last year, FICP Pulse Survey Report found that the trend has been toward planning bigger events.

While the percentage of respondents saying they anticipate an increase in the number of meetings they will be planning has continued to increase, more meetings professionals noted a decrease in the size of meetings being planned than in previous pulse surveys. Respondents from financial services companies, however, reported increases in both size and number of meetings.

Other findings include:

  • A supermajority (75 percent) said they are taking steps to control F&B costs.
  • A majority (55 percent) are eliminating bottled water and one-third are eliminating full-day beverage service, shortening receptions or downscaling menus to control F&B costs.
  • Increases in ancillary costs—Wi-Fi and shipping—were called out as a budget challenge by 73 percent of respondents.
  • Increasing room rates seem to be the new reality for 74 percent of respondents.

Note: FICP is a partner with Meetings Mean Business in the effort to tell the story of the significance of the meetings sector to the larger world.