Face to Face: John Botica – Damage controller

The financial services industry put product before people and paid heavy price, says Guardian Trust’s managing director John Botica. The price the industry paid was, of course, nothing compared with the injury it inflicted on the investment portfolios of its customers. But lessons have been learned, according to Botica, who has been in his current role for little over year now.
The feeding frenzy prompted by excess investment funds and throwing investment caution and client care to the winds proved just too much when the global financial crisis (GFC) hit. The financial services sector became obsessed with “creating investment products and taking them to the market rather than focusing on the risks they were creating for investors and their customers”, says an understating Botica.
“We stopped asking what it was that clients really needed to both generate income and simultaneously protect their investment.”
The upshot of this reverse thinking is that investors now fret over losses in their portfolios which could, and should, have been avoided. As Botica now puts it: “Investors are, quite rightly, unhappy with the financial services sector. They thought they were taking professional advice, only to find they were let down. Larger institutions in particular have not been client centric.”
The industry outcome is, he says, that the financial services sector is “now at critical recovery point” in its evolution.
Guardian Trust’s particular response to the industry’s predicament is to invest more in the training and development of its employees, says Botica. “I’ve only been with the company little over year. However, staff turnover is and has traditionally been low. Their technical competency has undoubtedly been well catered for. But we need more than technical competency to turn things, particularly attitudes, around. We’ve got to learn to build relationships and appreciate the value of those relationships.”
The company’s business model is, he says, already more “client centric”. The company’s processing and transaction activities have been centralised, freeing up employees to spend more time with clients. “It is change in business focus,” he adds.
That might not seem particularly revolutionary to businesses that have always understood the importance of the customer. But Botica’s admission that the finance and investment sector lost the plot and thought less about the needs and interests of its clients and infinitely more about processes by which to extract more funds from them is, however many times you hear it, still disconcerting and discordant note of recent finance market history. Money, to most of us, is so goddamned precious and difficult to acquire and retain that we don’t seek professional help to lose it.
Remodelling Guardian has not, he concedes, been easy. The need for change was obvious but, “change is always difficult to push through”. Redundancies that accompanied the company’s restructuring took about 20 percent of the people costs out of the business, and no doubt dollop of goodwill.
The end result, however, is to have the people with the right skills in the right jobs, says Botica. On the upside, the changes have “lifted employee confidence dramatically over the past 12 to 24 months. We are investing more in our people than we ever have before and they feel better equipped to do their job.”
To hone its competitive edge, Guardian has encouraged 60 of it employees to take the new Authorised Financial Advisers (AFA) qualification. “They are not required to, but we decided to go the extra mile to ensure our people are confident when they talk to clients,” he adds.
Botica’s rationalisation for supporting the changes introduced by the Government’s AFA programme and related regulations is simple enough. “It’s about lifting New Zealand’s financial and investment literacy. You can put as many legislative and regulatory changes in place to try and protect investors as you like but, unless those actions are embraced by the industry we’ll be no better off tomorrow than we were yesterday.”
To Botica’s mind, introducing additional layers of legislative complexity does not, of itself, afford any great investor protection. On the other hand, he thinks the changes introduced along with the establishment of the Financial Markets Authority (FMA) to more effectively monitor and regulate New Zealand’s financial services industry are making difference.
There is, he says, no one regulatory model anywhere that offers panacea to all the problems associated with opportunist investment professionals. “New Zealand seems to have adopted safer way of managing the problems than many other countries.”
The financial services business and environment might have changed post global financial crisis (GFC), but has Botica’s personal management style and approach changed with it? His answer is somewhat circuitous.
“I have had to change my business focus. The market was moving faster than you could manage it. It moved so rapidly that decisions were likely to be successful whether they were appropriate or not. The market would carry you through,” he says reflecting on pre-crash days.
“That has changed. My focus is now more strategic. I am now more reliant on my management team. I gather more market intelligence to equip myself better to lead and direct, and focus on where next to turn the ship.” His job, therefore, is little more intellectual but that, apparently, “makes it more personally interesting”.
Botica concedes that this personal and organisational transformation does, however, leave him more “vulnerable” as manager. On the other hand, “having more skin in the game delivers more rewards when you’re successful”.
His success as chief executive is now measured by the positive reaction his employees have toward the implementation of key strategic decisions. Decisions such as last year’s purchase by the Australian Trust Company of The New Zealand Guardian Trust Company. “We got 95 percent positive tick on that,” he adds.
The move was not, he says, “a New Zealand financial services company being bought by an Australian financial services company – quite the opposite. It was and is blending of two distinct companies and strengthens our position in this niche trustee company market.”
The abuse tossed at the antics of the financial services sector notwithstanding, Botica enjoys the business. “I always have,” he adds. “The onus now is on us to restore investor trust. No matter what business cycles we are working through, this is an intellectually stimulating business.
“My personal values include strong desire to give something back to the community. We do that by looking after the wellbeing of our clients. What I like about the trustee investment company model is that we look after the inter-generational wealth of our customers, their families and their communities.
“What gets me up in the morning is the opportunity to make positive difference to people’s lives. It’s what I want to do. I left fantastic and well-paid job at AXA and took risk on where I was going next. Now I have the opportunity to do what I really want to do.”
That’s fine for John Botica, but what does he think the people who work for him believe he brings to his role as MD of Guardian Trust?
“Security. I hope and believe they see me as well-equipped individual who has the background and experience in the financial services industry to ensure that company that has been around for 125 years and with blue ribbon client list, won’t risk the company’s future.
“I hope they see me as someone they can trust to do the right things in the right ways. I think I am someone they are able to freely talk to. I am probably more affiliate than many CEOs, particularly in this sector. My personal values are based on honesty and integrity and I care a

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