John Taft, CEO of RBC Wealth Management-U.S., recently sat down with On Wall Street on the sidelines of SIFMA’s Private Client Conference. Taft, a former chairman of SIFMA who currently oversees over 2,000 advisors at RBC, shared his insights on increasing regulatory scrutiny, the growing complexity of the marketplace and the role that leadership plays in wealth management firms.

OWS: The regulatory environment has become more imposing in recent years.  Are more changes coming?

Taft:  Regulatory requirements have become significantly more burdensome since the financial crisis. Every week there are new rules proposed by the SEC or FINRA that increase the regulatory hurdles that advisors and wealth management firms need to clear as they try to help their clients.

There is no end in sight.  It’s been a steady drumbeat of heightened rule making and enforcement.  Advisors and firms are spending more and more time on compliance and less time on and less resources on helping clients.

OWS: You have said that the increasingly complex post-crisis marketplace favors larger firms over smaller ones. Why is that?

Taft: I definitely think that the business costs and resource demands of navigating regulatory complexity, product proliferation, and change generally are proportionally much greater for smaller firms than larger firms.

So yes, I think that’s a competitive disadvantage for small firms.

OWS: What is your vision for RBC Wealth Management?

Taft: I get asked that all the time by people thinking of joining our firm.  The vision is all about excellence.  It’s not about being the largest wealth management company; it’s about being the best.

And culture is a key part of that. The Royal Bank of Canada has a reputation for client-first values. It’s a beacon of responsibility, capital strength and stability. The further we get from the financial crisis, the more we forget that RBC and the Canadian banks lived up to the way people expect banks to behave. We never needed to be bailed out.

OWS: Can you characterize the culture at RBC Wealth Management?

Taft: It’s Canadian.  It’s about stewardship, preserving what people entrust us with.

OWS: You’ve said elsewhere that culture is set at the top of the firm. How do you set the tone?

Taft: I think that as a leader it’s critical that you continually think about and talk about what we do and why.  How do we do it to make the world a better place?  That may seem grandiose, but people want to know that; people want to know that what they come into the office to do is meaningful.  We are helping clients manage their wealth so that they can live better lives.  As soon as you can communicate that, you are 90% of the way there.

Continually reminding our employees of the importance of what we do and why is probably the most important thing I do.

This interview was conducted and edited by Andrew Welsch.


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