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Just Because You Can Build It, Does Not Mean Advisors Can Sell It

By Sean

In the theme song to his semi-autobiographical film, "Get Rich or Die Trying," top-selling rap artist 50 Cent brags, "I can sell anything, I'm a hustler, I know how to grind / Step on grapes, pour them in water, and tell you it's wine." His point is clear: it doesn't matter what you put in his hands, he can sell it...to somebody.

Unfortunately, 50 Cent does not work at Merrill Lynch, Smith Barney, LPL, or any of the other large distributors of mutual fund products. The advisors at these firms, unlike 50 Cent, can't sell everything. So, these firms try to stock the shelves with products that advisors can sell, or at least have a very good chance of selling.

One Mutual Fund Coordinator at a large distributor summed it up perfectly when describing how most asset managers approach product development: "They manufacture what they can manage without thinking about what advisors can sell and fit into the portfolios." The message to product development teams could not be clearer: It's not about having the most innovative products; it's about having the most innovative products that advisors can actually sell.

What most firms fail to realize is that they have a resource to vet product development ideas in the Mutual Fund Coordinators at their distribution partners. Several Mutual Fund Coordinators confirmed as much during kasina's research for its forthcoming whitepaper, "Breaking the Bottleneck: Acheiving Distribution Success by Supporting Gatekeepers' Needs." To succeed, asset managers need to begin using this resource.