Take a moment and think about the great financial planners and investment advisors (collectively referred to as advisors) in our industry. What behaviors and traits do they all have in common?

Some readers will say they are all RIAs. Not true; some of the best and brightest advisors I know in the industry are registered reps. Others might guess that they are all fee based. Again, I would respectfully disagree. I have yet to find a strong correlation between the source of advisor compensation and integrity or professionalism.

On the other hand, those of you who say they are viewed as leaders in the eyes of their clients and staff, their peers in the industry, and in the communities where they work and live, would be correct. Great advisors also tend to be great leaders, and clients place their trust and confidence in them because of their leadership traits. One can rise to a position of leadership by the role or position he or she assumes, or by influencing the decisions of others.

Leadership, as defined within the context of fiduciary responsibility, is about projecting ethical and objective advice, and convincing all parties involved about the investment process to follow and to do what is right.

You have to be viewed as a leader through the eyes of your clients. If you're not, you're never going to gain their trust and confidence; and you're going to have difficulty keeping your clients through the current crisis. The first response to any crisis should be (though often is not) a leadership response; a financial crisis is no exception.

If you accept this statement, then the follow-up question should be: What are the leadership chracteristics of your unique role as an advisor?

To answer that question, I need to provide some background information. I recently completed an 18-month assignment as the Director of the U.S. Coast Guard Academy Institute for Leadership. One of my pet projects was to analyze why the Coast Guard was so successful in its response to Hurricane Katrina. They were faced with the same crisis as every other government agency, yet theyoutperformed them all—how and why?

I discovered that the short answer was "ethos," or characteristic spirit. The Coast Guard has a well-defined ethos. No matter where you sample the Coast Guard's inner core, there is a consistency in the leadership behaviors, core values, sentiment, moral nature, guiding beliefs and decision-making doctrine of the organization.

In the aftermath of Katrina, there were two key elements of the Coast Guard's ethos that contributed to their success. The first was standardization: Aviation and boat crews are each trained on the same procedures, so they can be mixed with crew members from any other unit. The Katrina crisis pulled crews in from all over the country—crews that were able to hit the ground running and didn't have to wait for further direction or instruction. The second related key ethos element is the concept of "independent steaming." Coast Guard personnel are accustomed to being delegated responsibility early in their careers and to assume on-site responsibility for operations where life and death often hang in the balance. For the Coast Guard, Katrina represented a surge in operations, not a change from what it does every day.

A KEY TO SUCCESS

Every organization, even every individual, has an ethos—but great organizations and successful leaders have a defined ethos. The task at hand is to identify the leadership characteristics that are essential to a well-defined ethos—in this case, to a fiduciary ethos. (Full disclosure: This is the subject of a forthcoming book and professional development course which will be offered through SourceMedia.)

I have partnered with Eric L. Herzog, an organizational consultant, to develop the ethos framework. Together we have tentatively identified 23 leadership characteristics that we believe are essential to defining an ethos. In this column, I will describe six of them—the six quintessential ethos leadership characteristics.

We found that a successful fiduciary advisor must be intelligent, innovative, decisive, courageous, honest and steadfast. These six quintessential fiduciary leadership characteristics each correspond to one of the steps of a traditional investment management process: analyze, strategize, formalize, implement, monitor and assess.

We're in the process of developing a web-enabled leadership assessment instrument with the consulting firm HR Chally, which will be based on these leadership behaviors. This is how we're defining each one. You can use these definitions to assess the talents of your staff, as well as yourself.