blog

How to Sell Investment Products to RIAs

by Steven Miyao

Asset managers should create a dedicated team that works with the largest RIAs. Most firms think that all RIAs are the same, but our FA Vision data shows that there are two very different segments of RIAs. The top 6.8% represent 47.8% of all RIA assets and average $884.5 in AUM. The remaining 93.2% have the remaining 52.2% of assets and average only $70.7 in AUM.

What do large RIAs care about?

The Top RIAs have significantly more assets and place more importance on:

• their internal research department
• an asset manager's investment process
• managers' tenures
• wholesalers' knowledge of competitive products

On the flip side, they place considerably less importance on:

• their relationship with a wholesaler
• a wholesaler's opinion
• Morningstar/3rd Party Ratings

Creating a dedicated RIA sales group

Asset managers who want to specifically address this very attractive segment should create a dedicated sales team for these top RIAs. This team will help the large RIAs conduct manager searches for specific strategies. Our consulting experience has shown that this team's skill set needs to be much more like that of a national accounts manager than that of a wholesaler. They need to be comfortable holding due diligence meetings and should have the following skills:

• Deep industry and competitive knowledge to understand the RIA's business, and assess opportunities and challenges for the firm;
• Excellent product knowledge and budget management skills to develop mutually beneficial strategies and assess quantitative progress toward meeting them;
• Teamwork and leadership skills to execute together against mutually beneficial strategies for product, marketing and sales management; and
• Presentation skills to help them in the final presentations to the RIAs.

Benefits

If asset managers obtain a mandate from these advisors, they will not require the same level of in-person wholesaler support. Furthermore, assets will continue to flow in, because they tend to be more research driven than other RIAs or Independent Financial Advisors. Only firms who develop the right skill sets for their RIA sales will be able to take advantage of this lucrative opportunity.