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A New Type of Wholesaler?

by Lee

Whether you know it or not, your firm's wholesaling strategy may be hurting the efforts of your National Accounts group.

When meeting with distribution partners, National Accounts teams often set an expectation for the amount of wholesaler coverage in the distributor's branches. Today, these expectations are often not being met because wholesalers have virtually complete freedom to go where they want. Luckily, most distributors are not attempting to track this or are unable to do so effectively. Times are changing, however, as we heard consistently during research for our "Breaking the Bottleneck: Achieving Distribution Success by Supporting Gatekeepers' Needs" whitepaper. Distributors are increasingly evaluating coverage and benchmarking asset management firms' wholesaling efforts against their peers.

Because of this change, firms must ensure that their wholesalers go where National Accounts has promised that they will. Many wholesalers, however, will say that they shouldn't visit certain offices because there is not a good opportunity there. While this may be a cover for other issues (bad location, difficult branch manager, etc.), it is often true that some branches within a network are not worth visiting. Firms nonetheless must ensure that the coverage that is promised to the home office is delivered in the field. Whether this objective becomes part of a firm's compensation plan or not is a firm-specific decision, but this must be a factor that is accounted for somehow in every firm's wholesaling strategy and something that is managed against.

As firms explore non-traditional wholesaling models, they want to even consider a new wholesaling role dedicated to covering the less desirable branches at the firm's key distribution partners. Individuals in this lower cost role would not have the same sales expectations as a traditional wholesaler (or possibly any at all), but would rather serve to fulfill promises that were made, and possibly pick up some additional assets along the way.