What's key to driving distribution and, thus, business results? Apply non-traditional metrics to sales force compensation, says a new FUSE Research Network study.
According to the study, better sales force management can be critical in helping improve retention rates, which have declined substantially over the last decade.
"Because of the velocity of assets within the business right now we think that how sales management can drive behavior and potentially better align compensation with overall business results is going to be an important function as we move forward," said Michael Evans, president of FUSE.
"If there is an impact to retention rates that wholesalers can drive, from a sales standpoint, sales management needs to drive behavior utilizing different metrics and tools."
While the majority of firms will still base commission off gross sales, 41% of firms have added a net sales commission component to wholesaler compensation, the study shows. Other firms are also using rewards based on product diversity.
Besides compensation, Evans also advised that mutual fund firms work to find advisors who are strongly inclined to work with the organization and foster stronger relationships with better distributors.