blog

Hybrid Wholesaling: Two Questions, Three Models, and Four Drivers

By Eric Daugherty

Now that Hybrid Wholesaling has come of age, it is time to ask two key questions:
1. Are there optimal ways to deploy hybrids?
2. Are they here to stay?

Fortunately for this blog piece, the answer to both questions is yes.

We just published Excellence in Distribution: Hybrid Wholesaling, a study that discusses the future of Hybrid Wholesaling teams. We found some interesting benchmarking data and insights.

• 46% of firms source Hybrids exclusively from the Internal desk
• Hybrids spend 67% of their time selling & servicing, a greater proportion than Internals or Externals
• 57% of Hybrids own their own territories; the remaining 43% operate as part of a team
• Hybrids receive an average 47% of the compensation of an external wholesaler
• Territories for Hybrids average over 2,000 served advisors and $75 million in annual sales, as opposed to the 250-800 advisors we recommend (graphic below).

More intriguing than the data, however, are the three optimal models we recommend to deploy Hybrids. While many firms adopted Hybrids as a means to replace higher-cost Externals (and this is a valid use, for sure), we see opportunities for firms to utilize one of the following models to maximize productivity in the future:

• The Opportunistic Model
Hybrids plug temporary gaps or address new opportunities: vacant external position, retention of assets, or a new geography
• The Spinoff Model
Team of hybrid wholesalers pursues a new channel or product (RIA, DCIO)
• The Team Model
Manage a territory which segments advisors by profitability level and service preference