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The Matryoshka Principle: Methodology (Part 2)

Simply Better Biz article

In part two of his four part series, Karl Dines explores how the Matryoshka Principle can be implemented to help create robust methodology.

  • Comprehensive methodology is essential to ensure a robust business in the post-RDR landscape
  • A logical proposition will always lead to good client outcomes
  • Guidance from the regulator and compliance support is a key part of your methodology

The Matryoshka Principle, when applied to a financial services business, consists of creating a solid but flexible framework based on three interlocking procedures.

“The beauty of this model is that it is transferable to any proposition to create a robust and repeatable advice process.”

Here, in our second article on the Matryoshka Principle, we will be looking a little closer at the first of these systems: Methodology.

Methodology is described in a quick Google search as a body of methods, rules, and postulates employed by a discipline: a particular procedure or set of procedures. When dealing with something as complicated as a post-RDR financial services business, it is crucial to have a set of rules and procedures which follow the regulator’s expectations and guidance.

When putting Matryoshka into practice, you would look to describe a set of high level beliefs and principles, basically writing down what you passionately believe in, and then follow a logical structure to implement these principles. The beauty of this model is that it is transferable to any proposition to create a robust and repeatable advice process. For example, Matryoshka can help with your:

Client Proposition: how you charge, making sure it’s clear, fair and not misleading

Investment Proposition: your investment solutions, generating good client outcomes

Supplier Proposition: carrying out unbiased due diligence on the best platforms/providers

And remember, there is never any right or wrong methodology, provided it is logical and which will lead to good client outcomes.

So, what might you want to include in your Methodology? As an example, here is a suggestion for dealing with your Client Proposition:

As you can see, addressing each of the aspects required in a client proposition in turn, and dedicating a robust procedure to deal with each of these is a simple yet incredibly effective method to ensure good, and compliant, customer outcomes. Next time I’ll be looking out how to use the Russian Dolls in your processes.

proshchal'nyy privet!

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Karl Dines is Head of Business Consultancy at SimplyBiz Group

 

  • Aberdeen Asset Management
  • AXA Investmnent Managers
  • Baillie Gifford
  • BlackRock
  • BNY Mellon
  • First State Investments
  • Goldman Sachs Asset Management
  • Henderson Global Investors
  • Investec Asset Management
  • Invesco Perpetual
  • J.P. Morgan Asset Management
  • Jupiter Asset Management
  • M&G Investments
  • Schroders
  • Square Mile Investment Consulting & Research
  • Neptune Real World Investors