Promotion Designed to Boost Short-Term Sales
'It's been a very long time since we've added a full dealer reallowance on a series of funds,' said Karen Walsh, VP of national accounts and inside sales at
The reallowance is intended to bring in assets in the short term but also is aimed at bringing more brokers to John Hancock.
'People who do business with John Hancock are always extremely satisfied with the service and performance they're receiving in their funds. Our challenge is always to increase the number of brokers who are doing business with us,' said Walsh. 'This definitely is one way to turn some heads and get people to invest in
The promotion runs from July 30 through September 28. Re-allowance varies according to share class: full dealer (100 basis points) on A-shares, 50 basis points on B-shares, and 25 basis points on C-shares. Hancock's global, international, and money market funds are not included in the sales program.
The firm had more than one reason for keeping the doors closed on its international offerings: 'We recently signed a contract with the sub-advisor (Nicholas-Applegate) so we didn't want at this point to have a full dealer reallowance, but we also have a lot of market timers that seem to look at those funds, so we didn't want to open the floodgates even more so,' explained Walsh.
John Hancock has not established production goals for the promotion, but Walsh said the firm expects to see 'a good percentage increase in sales' over the coming months.
Although reallowances remain controversial as a sales promotion, Walsh said that John Hancock's new program is designed to draw attention to the firm's performance.
'There are a lot of broker/dealers that won't participate in full dealer reallowances, including some of the wirehouses. They don't want to encourage churning or have them buy another fund family today,' she said. 'They also want to make sure that they're selling clients suitable products. Because we have good performance, we think it's a way to get people's eyes to Hancock.'
Not all of the John Hancock offerings included in the reallowance have excelled, however. While