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What is the "Price of Admission?"
By Sean
If you're going to this Thursday's Kelly Clarkson concert at Jones Beach (like one of my colleagues), it's roughly $50. If you're hoping to stand in Fenway Park's Green Monster Section for the August 19th Red Sox game against the New York Yankees, the bidding starts at $599 for 2 tickets. If you're an asset management firm hoping to put yourself in the good graces with the home office of a large distributor like Merrill Lynch or Raymond James, the price of admission might just be an effective value-added program.
Conversations with National Sales Managers and distributors' Mutual Fund Coordinators for our upcoming study, Breaking the Bottleneck: Acheiving Distribution Success by Supporting Gatekeepers' Needs, suggest that distributors are increasingly leaning on asset managers to support their advisors through the delivery of value-added programs.
The cardinal rule with these types of programs: Don't push your products, focus on helping advisors. The "value" of value-added programs to asset managers lies in generating wholesaler follow-up opportunities. In terms of topics, distributors frequently cite two areas as being important:
- Practice Management - Supporting the growth and ongoing management of advisors' businesses
- Team-based Selling - Helping advisors successfully adapt to, and thrive in, team-based selling environments
As more advisors, including those with wirehouses, shift to fee-based business models, these types of topics will be increasingly in demand by distributors. And, despite the claims of many industry reports that retail mutual fund distribution is driven entirely by legions of number-crunching CFAs, effective value-added programs are central to building strong relationships with distributors. As one Sales Director put it, value-added programs are the "price of admission" to large distributors' home offices.
Which reminds me, can anybody loan me $600 to start bidding on those Sawx tickets? They will win the East this year, finally!