Dreyfus Funds of New York is planning to make a major push into the financial planning channel beginning in the third quarter.
In the first quarter of this year, Dreyfus added nine wholesalers to its broker/dealer and financial planning team, bringing the total to 29.
"Their territories are now smaller, so instead of calling on four or five states, they may now have two states," said Mike Millard, executive vice president and director of sales at Dreyfus.
In addition, Dreyfus will set up a new financial planning/independent sales support division in New York by late summer to assist this wholesale team. The new division will be headed by Randy Lierman, who will assume the title of national sales manager for financial planning and independent sales. Lierman is currently the West Coast manager for Dreyfus' broker/dealer, financial planning channel.
Lierman will be hiring 15 to 20 internal sales consultants over the next two years. He will also be responsible for helping Dreyfus establish a "tie-in with a major accounting firm and a financial planning concern, so that we can answer any question a financial planner might have, be it about taxes, estate planning or asset allocation," Millard said.
Dreyfus expects the task could take two years because it wants to recruit outstanding financial planners and broker/dealers who understand the needs of the financial planning community, Millard said. It will not be easy to recruit such talent since working in-house at a mutual fund company has traditionally been seen as a "stepping stone to moving outside," he said. It also has not been nearly as lucrative as working independently, he said.
But Dreyfus is "looking for highly experienced people who want to make this their career," Millard said. And, Dreyfus will pay them well, he said.
Dreyfus decided to make a greater push into the financial planning arena after learning from focus groups that 82 percent of consumers identify strongly with the name Dreyfus, Millard said. Dreyfus figured it could build on this strong name recognition by improving its relationships with financial planners.
But Dreyfus did not want to just expand its financial planning wholesaling team. In part, that was because that is what most mutual fund companies have already done, and Dreyfus would be late in adopting the strategy, Millard said.
So instead, Millard decided to find out what financial planners want and need - from Dreyfus or any other mutual fund company. He spent considerable time over the past few months talking with financial planners to accomplish this.
Millard learned that a lot of independent financial advisors and financial planners have worked at larger money management organizations and greatly miss the resources, brainstorming and camaraderie those organizations offer.
"Financial planners are also under incredible pressure to market themselves" but do not have the resources to make that task easy, Millard said.
This is how he came upon the idea of a sales support division. It also inspired Millard to recently hire three sales trainers to work with Dreyfus' wholesalers. Millard wants to hire another three trainers and make their services available to Dreyfus' financial planning partners as well.
Eventually, Millard would like his wholesalers to be known by another name - consultants.
"But if I made that change today, it would only be a change on a business card," he said. He wants them to earn the title.