Compensation drives behavior. In the mid- to late-1990s, new money flowed into mutual fund products faster than it had ever before. Since that time, however, asset inflows have slowed substantially and firms have had to focus more on luring assets away from competitors. Despite these changes, wholesaler compensation models across the industry have remained more or less the same.
As competition for assets intensifies, senior Sales executives are beginning to sense a widening gap between firm objectives and wholesaler goals. Firms are recognizing that the manner in which wholesalers are compensated must change to reflect the industry's new competitive dynamics.
Among the primary drivers of change in compensation models are:
- Profitability:firms are moving closer to Intelligent Distribution, a strategy characterized by a shift in emphasis from sheer assets to profitable relationships
- Asset retention: realizing that new inflows to asset management products are down, firms are focusing on retaining assets already under management
Through our research, we learned that firms' complex and idiosyncratic approaches to wholesaler compensation do not easily fit into a series of easy-to-follow charts. On the contrary, compensation models vary significantly across roles. Given that difficulty, we report the following information for each of the wholesaling roles covered in this study:
- Average range of base salaries-- minimum, average, and maximum base salary figures
- Considerations driving variable compensation-- examples of factors impacting variable compensation plans
In its inaugural study of wholesaler compensation, kasina has outlined prevailing compensation models for internal, hybrid, and external wholesalers, as well as regional sales managers. Moreover, the study also highlights key considerations driving firms' current compensation models as well as emerging trends that may shape future models.
"Trends in Wholesaler Compensation" is available for purchase. If you are interested in this study, contact us at (212) 349-7412 or at research [at] kasina.com
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