To be truly successful for the long-term, wholesalers can't just talk about their products. That's not going to get them anywhere, says John Aguilar, head of intermediary marketing at Voya Investment Management. So how can wholesalers build deep, trusting relationships with advisors to truly become a partner rather than merely a product vendor. "Our most successful wholesalers are "students of the industry," Aguilar says, adding that many obtain additional certifications, such as CIMA and CFA. In the end, Aguilar says the wholesaler's job is to make advisors look good in front of their clients to help them to attract and retain clients and to build their businesses.
In a Q&A with Money Management Executive, Mark Spina, managing director at Voya Investment Management, discusses how wholesalers can more effectively capture market share.
Q- How are wholesalers capturing market share in this environment?
We believe that a consultative sales approach offers advisor firms the greatest potential added value. Our approach has two fundamental supports:
Building trust and deepening the relationships by having an informed investment perspective: Advisors and their clients are becoming more sophisticated, and so is our salesforce with many earning designations such as CFA or CIMA.
Know your products: thoroughly understand your firm's investment capabilities, the conditions in which your products offer potential advantages, and how your products compare to other offerings.
Q- What is the current interplay among wholesalers, fund providers and advisors?
Today sales interactions between advisors and wholesalers are often brief. Wholesalers must make every short interaction an excellent experience that drives toward the next step in the sales process.
Q- How are wholesalers using technology to attract and retain clients?
Historically fund providers have depended on proprietary data collected in their customer relationship management (CRM) systems. Firms are now using information from third party providers and client firms to analyze sales in greater depth to prioritize high-value opportunities. The industry is starting to use "big data" to develop predictive analytics to enhance wholesaler efficiency. By mining information firms collect on each advisor's past buying behavior, such systems help anticipate other strategies or products that an advisor might buy in the future
Q- What are the biggest challenges fund providers face in capturing advisor attention and assets?
To succeed, distribution teams must embrace a stewardship and service mindset, focusing all their expertise and resources to produce quality outcomes for clients. Advisors want information more quickly and rely more heavily on websites and internal wholesalers for details on products and the market, shifting the emphasis away from traditional face-to-face meetings with external wholesalers.
To deliver what advisors expect, wholesalers have to stay current to speak intelligently about market trends and be articulate when educating advisors about the products they represent.
Q- How are wholesalers tracking their business to be more successful?
Big data analytics promise the potential to tease out hard-to-see causes and effects, allowing sales managers to more effectively determine factors that led to success. Certain fund providers are pioneering the use of such analyses, and if they are successful, other fund providers will face competitive pressures to adopt similar methods.
Forward-looking metrics should significantly aid in the development of wholesaler performance and lead to a common approach to intermediary clients. These might include forward meetings and client interactions, number of planned meetings, and planned expenses.
Q- What are key trends from an M&A standpoint?
While increasingly competitive, the intermediary space is also increasingly attractive to a range of asset management firms. Traditional, institutionally oriented firms and alternative asset managers have been pushing assertively into the space as their traditional markets have also become more challenging. Traditional fund providers have looked to acquire, partner or hire alternative and "smart beta" managers.
Q- What are key trends from a wholesaler compensation standpoint? How is wholesaler compensation driving behavior?
To evaluate wholesalers' performance, fund providers are adding forward-looking metrics to traditional measures such as gross sales, sales vs goals and sales activity, firms are looking to set targets such as individual results above historical average, as well as analyzing and formalizing the best practices of top wholesalers.
The new metrics will seek to quantify the evolving demands on wholesaler skills. There will be more emphasis on articulating and communicating sophisticated investment strategies, more emphasis on outcomes than on relationship building.
Q- What is your future outlook of the industry? How can fund providers best stay competitive?
Market conditions, while challenging for wholesalers and their clients, are creating opportunities to build new and long-lasting relationships. Capturing market share requires a high level of activity combined with thoughtful and well-executed solutions for the advisors' practice and for their clients.
Wholesalers must be highly visible, well-versed in market and product knowledge, and empathetic to the advisors' situation. The firms and wholesalers that capture market share will blend time-tested relationship management skills with more scientific approaches to sales management.
Their sales forces will be well-equipped with timely investment and practice management ideas, as well as up-to-date product information.
A key element of success will be a service-oriented culture, built upon a deep understanding of clients' needs and capable of providing reliable, risk-adjusted returns over the long-term.