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Redefining the Wholesaler Team
by Deb Wetherbee
Over the past few years, in an effort to grow their businesses, more and more advisors have adjusted their traditional broker/sales assistant tandem to a team with more specialists. This is evident in our new FA Vision research, where 73% of advisors indicated they were part of a team. With increasingly sophisticated investors, it only makes sense to have more expertise available on your advisory team. The larger team concept is catching on, from inclusion of investment specialists to estate planning experts to business development experts. The benefits of working on a team are evident, and the idea is catching on in wholesaling too.
As kasina has been saying, asset managers need to maintain strong distribution teams that contribute to overall firm profitability. Our Costs of Compensation study suggests that you need to reward your best producers and find ways to keep job satisfaction high. We are beginning to hear about innovative distribution team arrangements in the field that help to retain top sales people. The team structure allows the members to focus on what they do best. The external can focus on face-to-face meetings while the hybrid deals with sophisticated RIAs (read our blog on this topic). Creative firms are, like advisors, turning to new team structures.
I have spoken with a number of firms that have added a third individual to the traditional internal/external team in each sales territory. The first example includes firms that have added a hybrid wholesaler. This givens the team the flexibility to cover the territory in the most appropriate way, based on the unique geography and advisor segments of each territory. In larger territories with fewer money centers the hybrid may cover advisors in remote locations. Alternatively, in territories with more money centers, the hybrid may cover more sophisticated advisors who do not require many in person visits.
Another example of using a third team member is the addition of a "CFA-type" or "National Account-type" to each existing external/internal team. This allows the team to bring additional portfolio expertise to sophisticated advisors, RIAs, Bank Trusts, or even the home offices that in their territory.
These models give teams the ability to customize their service offering at both the advisor and territory level, as well as optimize the different skill sets of the internal, external, and hybrid or "CFA-like" analyst.
Just as financial advisors have responded to investors' more specialized needs by creating teams of their own, asset managers have also begun to mirror their clients (the advisors) with creative sales team structures. The rewards for the asset manager are plenty: a more customized level of service to the advisor, efficiencies at their own firms, a more diversified firm/advisor relationship, and more ways to control compensation. I expect to see more unique team arrangements on both the advisor and wholesaling fronts over the next few months.