The founder who wants to be the least important person in the business 

In 1983, Peter Leggett put a blank sheet of paper on a desk and designed the firm he wanted to run. More than 40 years later, the chairman and chief investment officer of Arrow Private Wealth describes his own role in terms most founders would baulk at.

“I want to be the least important person in the business,” he says.

He is not being modest. The standard he set for the Melbourne firm was the one he first set for himself.

“The standard I wanted, or needed to accept for myself, was built around honesty and trust, and just speaking the truth,” he says.

He traces that back to his own family, and to “people around me that I knew I’d never had to second guess.” Leggett wanted the person at the top to be replaceable by design, a quiet definition of leadership succession in financial advice that is being tested now.

The firm began under his own name, as Peter Leggett Financial Services. It became Leggett Financial in 1993, Arrow Wealth Management in 2004 and Arrow Private Wealth in 2017, and it took out its own licence in 2022. Four decades of a founder steadily taking his name off the door.

Arrow is midway through a change of ownership, with new equity partners coming in and staff among them. So he wrote down the lessons of the past 40 years for the people who will run the firm after him. He came up with six words, and the first is culture.

“It’s about how people behave, how we make decisions, how we treat each other, particularly where no one else is watching,” he says.

What leaders tolerate

The second word is standards, and here Leggett is hardest on his own profession. Advisers are busy, and there is always something a leader notices but decides to deal with another day.

“In many ways, what leaders tolerate becomes the culture,” he says. “It becomes the culture of tomorrow.”

Arrow’s answer is a line staff can repeat without notes. “If you see it, own it, solve it, or make sure the right person does.” Leggett frames that as lifting the standard rather than quietly lowering it. He is also careful about the order in which pressure is applied. “People need clarity before they need accountability,” he says. When staff fall short of his expectations, he has learned to look at his own communication first.

None of it lives on a wall. “It’s what people experience every day,” he says.

At a firm of about 20 people, that shows up in small, repeated habits. Every second fortnight the staff meeting carries a kaizen session on 1 per cent improvements. Fridays bring a free lunch.

“What we’re traditionally not good at here in Australia is recognition and celebration,” he says.

Trust becomes the product

Trust is the third word, and Leggett has little patience for how loosely the industry uses it. A title does not confer it. “You cannot give trust. Trust has to be earned,” he says, through consistency, listening, keeping your word and admitting when something has gone wrong. Handled that way, trust stops being one feature of what an advice firm sells and becomes the thing itself.

“Your position can produce compliance, but trust produces commitment.”

The internal version draws less attention, and Leggett argues it decides the client version. Staff need to know their leaders will listen, keep their word and tell them the truth.

Advisers deal with clients and each other, and Leggett thinks reading both counts for more than technical firepower. Before a difficult conversation, he says, the job is to “try and understand it from the receiver’s point of view”.

What he hasn’t built

His sharpest warning is aimed at founders who look a lot like he once did. Strong operators build businesses around their own decision making, their own control and, as he puts it plainly, their own ego. That works for a long time.

“But sometimes in the future there may well be a price to pay for what they have not built along the way,” he says.

He has set himself a test most principals would rather not write down. “If the business needs me at the centre of everything, making the most important decisions in three or five years’ time, then I’ve failed in my role.”

By the end of this year, three of Arrow’s four new leaders will be in their 30s, the practical face of leadership succession in financial advice at Arrow. Handing over means handing them the decisions along with the titles, including the ones they will make differently.

He does not think a practice ever reaches safety. “I’m not sure that a business should ever relax or feel that it’s safe, because it’s something that we keep working on all the time.”

Stewardship and leadership succession in financial advice

The questions he puts to Arrow now borrow from Jim Collins. Is the culture strong, are the values embedded, and are the right people in the right seats? Sometimes, he concedes, people have to come off the bus altogether.

The sixth word is stewardship, and Leggett calls it the biggest lesson of the lot. “I’m not going to be able to lead forever, and nor should I,” he says. “Leadership is entrusted to us for a season.”

The questions he asks himself have changed to match. They are less about what he is trying to achieve, and more about what he is building and who he leaves behind.

Arrow does a lot of work on intergenerational wealth transfer, so he is running on his own firm the process he runs for client families. The conversation with his adult children runs along much the same lines as the one with his emerging partners. He tells younger leaders not to become a different person the moment they walk out of the office.

“The greatest legacy of a leader isn’t the organisation that they build,” he says. “It’s the people and the culture that they leave behind.” That returns him to the blank sheet of paper. What he drafted in 1983 was never the firm. It was the standard, and the standard is the part he is handing on.