Mar 1

Measurable Passion

posted by Peter Aceto under Culture



Why are certain people successful and others equally gifted, not? Why are supposedly average teams beating star-studded favourite teams? Why are certain companies always the first choice for customers? That’s what Jan Hommen, CEO of ING Group, asked in a recent presentation.

His answer? “Passion for execution.” The discipline and desire to make things happen – to consistently deliver excellence. While I fully support Jan’s statement, I will also add, that without a clear common purpose, passion can be irrelevant.

What I am referring to is the cultural mindset of an organization. Connected individuals, not companies, are the ones harnessing the power of influence. If you look at the current state of the world, we are in an amazing time of change. Technology is altering our digital infrastructure and how we interact with one another; and organizations are challenged to meet the new transparency demands of both customers and employees. Much more is expected from businesses today. To lose sight or discount these strong factors of long-term change is detrimental.

And so, the concept of ‘passion’ becomes an important part of the mix. At ING DIRECT, passion holds a great deal of value. But if you were to ask our head of HR, she would be specific in clarifying the assumption that some people make about passion. It goes beyond enthusiasm and big personalities. Passion, we believe, is most effective when two areas are combined. Of course, an individual with a positive aura, a natural go-getter attitude, likeable personality, energetic, and driven, would be a preferred candidate for any organization, but use those attributes in the wrong context and you might ignite a conflict.

For passion to be most effective, it needs to tap into a belief system, a purpose for why we do what we do, and it has to match the purpose and values of the organizations we are part of. That is what defines engagement. Are your personal values being encouraged? Is your ‘why’ aligned with that of the organization you are part of? Too much of a misalignment will cause conflict – conflict within yourself or within your team. Either way draining valuable energy that should never be wasted. This alignment simply can’t be fabricated or trained. Either you believe or you don’t. Either you are truly engaged or you’re not.

That is what we look for at ING DIRECT. We established a process called ‘Hire for Orange’ to help us identify that passion that is integral to our culture. At the final stage of an interview, the successful candidate is met by an ‘Orange’ peer – someone whose objective is not only to detect a go-getter and positive demeanor, but to genuinely believe and be inspired by a conviction to make a difference, to affect change.

It’s about creating genuine engagement – whether with employees or customers. That is our measure for passion at ING DIRECT. We continuously gage the level of commitment employees and customers have towards the brand. What is the mood of our organization? How are our customers and communities feeling? Do they believe in us? What do they say about us? Even if we don’t ask the questions, the answers are there, in the passionate points of views Canadians and our employees have of ING DIRECT.

I said it earlier, connected individuals are the ones harnessing the power of influence – we simply can’t ignore the human element in business. So whether we can measure passion is neither here nor there. What’s important is that we can’t dismiss passion, particularly when it is aligned with a cultural mindset. It has a substantial impact on the bottom line. With passion, with alignment nearly anything can be achieved in life and in business. Harnessing this energy is difficult but certainly worth pursuing.

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Feb 15

The relationship between love and money

posted by SuperStarSaver under Savings



 

Consider this. You’re on a date with someone you are pursuing a long-term serious relationship with. You’re trying to figure out the best way to bring up the topic of finances, yet you end up talking politics instead. Why is it so hard?

Even though 92% of Canadians want to date someone with a similar money outlook, only 50% actually know everything about their partner’s finances. This, according to a recent study we conducted at ING DIRECT.

Obviously, money isn’t a popular subject couples rush to talk about when they fall in love. But it is certainly something that should be on the radar. Money is a huge factor in the health of a relationship. Knowing how your partner views money, spends money and plans for the future are important considerations in a relationship, and topics that should be discussed sooner rather than later. It really is a fundamental values-based decision. How will we view money? What does it mean for us as a family?

When I look at my personal views on money, they stem back from how I was raised. We were a family of savers. I can remember from an early age doing odd jobs, working summers and getting a real sense of what it is like to work hard, and save! Those values also shaped how we view financial wellbeing in my own family.

I am not suggesting that we treat relationships like a business. However, as you become more involved with someone, couples need to discuss what each partner is bringing to the table in terms of their finances, and decide how they’re going to manage those finances going forward.

Luckily, my wife and I see eye to eye on the topic. We are savers by nature. We get a real kick out of watching our savings grow. We’re deliberate about buying things. We delay buying things so that we won’t need to use credit. We have a long term view on finances, probably best described as a marathon, not a sprint.

I strongly believe those lucky enough to be self-aware, those who are open about their views within a relationship, are the ones experiencing financial wellbeing in the end. They are not affected by other influences. Financial decisions are theirs to make. But it’s not easy. Do you ever find yourself ‘caught-up’ with what others are doing? Thoughts creep up in your mind; my neighbour’s kitchen sure is nice, maybe it’s time to renovate!

When you know who you are, what’s important for your family, and why you do what you do, you have a better perspective on how you spend your money. It’s about being in control of your choices, being in control of your life. Are you making these important decisions? Or is it your neighbour and the whirlwind of consumerism that surrounds us everyday?

Take Valentine’s Day for example. How much pressure did you feel this year to make sure you come home with something? You feel guilty if you don’t spend, and you feel torn about why you are spending on silly things. But before I start upsetting Cupid, I am not proposing that you boycott the Day. My message is simple: save first, pay yourself and your family first, and then if you want to splurge, do it. But understand who is in control, and who is making the decisions for your spending – how much you spend and when you spend it.

Couples should be having these discussions, and often. Money can no longer be a taboo subject. Learning and talking openly about it is a sure way to have financial wellbeing in your life and in our country.

I love what Gail Vaz-Oxlade recently said at a ‘Love and Money’ session at the ING DIRECT café in downtown Toronto: “Learning about money takes commitment. Read, think, talk, and brainstorm. That’s how you get better at it.”

Hope everyone had a terrific Valentine’s Day!

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One of my goals with my blog this year is to invite guest experts from our business to share insights on their area of expertise, and what ING DIRECT is doing to help change the conversation around money in Canada. My first guest blogger is Silvio Stroescu who leads our mutual fund team. Silvio and his team are particularly busy at this time of year, RSP season, helping to coach and educate clients about mutual funds. Did you know that mutual funds are the most popular investment for RSPs? How much do you know about the mutual funds in your portfolio?

Raise your hand if you wake up in the morning thinking about which mutual fund to buy.  It’s not something that’s on most people’s radars, yet close to two-thirds of Canadians invest in mutual funds as part of their retirement portfolios.  The reason most of us end up investing in mutual funds is because they are sold to us.

We don’t buy mutual funds with the same level of consumer vigilance we show when buying our cars or our homes.  This is alarming when you consider that these investment buying decisions have an enormous impact on our quality of life right when we need it the most.

We are not experts in every aspect of our lives, which is why we visit mechanics, see doctors or call a plumber. With over 6,500 mutual funds available, picking the right mix for our portfolio seems to be about as easy as picking a winning lottery ticket.  So, it’s no surprise that Canadians tend to outsource the mutual fund buying decision to an “advisor”.

The challenge is that most advisors we depend on to help us make investment decisions are salespeople caught in a glaring conflict of interest.  They are compensated by fund companies based on the mutual funds they sell.  Mutual funds with higher compensation for the salespeople translate to higher fees for us as investors and inflict a burden on our retirement goals.

There are plenty of straightforward and cost-effective investment options to satisfy our retirement portfolio needs and we don’t need to be financial experts to understand them or buy them.  To ensure we take the advice that is right for us as investors, we just need to be more engaged in our investment buying decisions and be aware of the options available to us.

For many people, investing the time today to understand the value they are receiving from their advisors, and investments could allow them to retire a few years earlier (see chart 6). Make sure you know exactly how much you pay your advisor, and for your mutual funds, on an annual basis. Do you feel the cost is justified based on the advice and other financial planning (i.e. estate or tax planning) you are receiving, and the return of your investments? You don’t need to be a financial expert to answer these questions. But what you uncover will make you a more educated and engaged investor, which we can guarantee is in your best interest.

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I’ve been thinking a lot about how often we’re reading stories about personal finance and money in the media. It’s something that’s dominated news coverage around the world for several years now given the economic conditions and increased willingness of people to incur debt. This year is shaping up to be no different. As the leader of a company whose sole focus is helping people save money and achieve better financial wellbeing, I support more attention being paid to the topic.

What I wish I’d see less of are stories about how to beat the stock market and ones with headlines that make saving for retirement sound impossible. Everyone’s individual situation is different, but the one piece of advice I bet could help most everyone is to keep saving or start saving in some way – be it $10 a week or $100 a month, and to keep your finances simple – simple enough for you to understand and to manage on your own.

I know it doesn’t sound sexy or sophisticated, but I can guarantee that it works. It has for many of our close to two million clients, especially those who have taken some simple steps to build their savings effortlessly through an automatic savings plan, or stretched their savings further by avoiding or reducing unnecessary and excessive fees for financial products.

At this time of year particularly in Canada, the market is flooded with voices, opinions and advice on everything from picking mutual funds to RSP contributions and what products deliver the best tax savings. I hope ING DIRECT’s voice stands out to Canadians. I hope we can help put things in perspective, eliminate some of the confusion and anxiety around saving money, demonstrate we offer a different choice and advocate the importance of saving without making it seem impossible.

I’m personally committed to reaching as many Canadians as I can to spread this message. I want to be part of your conversations about money, and encourage you to reach out to me via this blog, my Peter Aceto Facebook page www.facebook.com/savingsceo or on Twitter @CEO_INGDIRECT, to start a dialogue about achieving greater financial wellbeing in your life.

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Jan 3

HELOC – let the Orange shine through

posted by Peter Aceto under HELOC



We surveyed Canadians recently on their top personal finance concerns going into 2012. Not surprisingly, 1 in 5 Canadians are most concerned about the amount of debt they have. A recent report from Stats Can found that Canadian household debt has reached an all-time high of 153% to disposable income. With interest rates at all-time lows, this shouldn’t come as a surprise. What concerns me most about all of this is the type of debt Canadians are holding and whether they have a plan in place to pay it off.

One of the smartest ways to hold debt is through a home equity line of credit (HELOC). It’s a revolving line of credit that’s secured against the equity in your home, and the interest rate is normally quite low, compared to other lines of credit, loans, and obviously, credit cards. The thing is HELOCs have gained a bad rap in recent years.

We’ve heard countless examples of how HELOCs are sold irresponsibly by financial institutions – where they essentially push more credit on people than is required, requested, or that they can afford. On the other side of the coin are some people who have misused HELOCs, essentially treating their homes as ATMs to finance depreciating assets like big screen TVs, cars and even their purchases at the Beer Store versus home renovations or unexpected repairs.

We’ve been thinking about HELOCs for a long time at ING DIRECT. We know many of our clients are refinancing their mortgages to gain access to more credit, which can be expensive from a legal perspective, and works against their plans to pay down their mortgages as quickly as possible. We also know that HELOCs are a great invention, but that many products currently on the market incent people to take more than what’s needed and hold onto their debt for longer than necessary, affecting their ability to pay it back.

It seemed like a perfect opportunity for ING DIRECT to get involved. Like we’ve done in other categories we saw an opportunity to create a lending product that has features and is sold with the client’s best interest in mind and that makes business sense for us too.

We’re proud of our new home equity line of credit, launched just a few weeks ago. As with all of our other products this one has some unique and orange features that capture the true essence of a HELOC and that allow our customers to access credit affordably, use it only when needed, and to pay it off as quickly as possible.

ING DIRECT’s HELOC is not linked to an ATM card, which means it requires a sober second thought to access the credit and makes it less accessible for non-essential purposes. Our staff won’t be incented to provide more credit than is needed or requested. We’re helping clients set up a regular fixed payment plan up front so that they can pay it off faster, and not get trapped into making only minimum payments. And of course, like all of our products, our HELOC is well-priced, meaning clients save on interest, helping to accelerate the payback.

We’re making our Orange version of the HELOC available to Canadians because we believe that when needed and when used responsibly, it can be a smart addition in helping Canadians to manage their financial well being.

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