blog

Hybrid Wholesaling Gains Momentum

By Steven Miyao

In the last 3 months alone, I have spoken to more then 10 firms about how to implement hybrid wholesaling. Most approach hybird wholesaling as a strategy alone, rather then a means to increase scale. Successful distribution organizations understand that they need to make hybrid wholesaling an integral part of a larger strategy in order to get more quality contacts with advisors. As a result they earn more assets.

The following are the most important characteristics that we have identified as successful indication of hybrid implementation:

- Coverage; Hybrids should service two or three times as many advisor relationships as an external. This will ensure that firms are increasing coverage with hybrids and, as a result, inflowing assets.

- Travel; To maintain responsibility for a larger number of advisor relationships, hybrids should operate primarily from the home office, using the phone, e-mail, and other Web-based tools to engage advisors. At most, hybrids should spend only 25 percent of their time traveling to meet with advisors.

- Compensation; Hybrids’ compensation model should be similar in structure to an external. To reflect their reduced travel, hybrids should receive a slightly lower base salary than externals, but should otherwise be eligible to receive a percentage of every new dollar they bring in the door, just like externals.

Again keep in mind that this is just one of the tactics that will help distribution organizations get more scale.