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Advisors and wholesalers often have a complicated relationship. There’s much value each can bring the other.
Advisors and Wholesalers
Years ago, one of the editors at Financial Times Publications explained differences between mutual fund marketing in the UK and the US. In the UK, fund companies advertise directly to the public. When a client has a need, their advisor can ask: “What fund companies do you know?” Drawing them out, they can then find a suitable recommendation within the fund family that’s on the client’s radar.
In the US, money managers rarely advertise directly to the public. No magazine spreads or TV ads. They market to advisors. Advisors recommend products to clients.
This means hundreds of fund companies are competing for the advisor’s attention. How? By trying to get face time, hosting lunches and supporting the office. Many advisors, wanting to focus on business, consider their marketing an unwelcome interruption.
Sounds grim for the wholesaler, right? Dozens of voices shouting for attention! Actually, the pendulum can swing the other way. Advisors often develop their own investment matrix, populated with preferred providers. Several fund companies are their “go to” choices. These relationships can last years. The relationship is portable. If an advisor changes firms, the wholesaler just changes the e-mail address and phone number in their contacts app.
How Can Wholesalers Help Advisors do Business?
Advisors share a common problem. So much of what happens in the market is beyond their control. A client calls: “The DJIA is down 1,000 points!” The advisor can’t say: “I didn’t send it there!” The wholesaler represents a collection of money managers. The wholesaler acts as a middleman. Their manager’s opinions provide an additional point of view.
How can wholesalers help advisors?
1. What’s working? Advisors live in a defined world consisting of their office and the advisors surrounding them. They know advisors at other firms, yet it’s rare they will share their best prospecting ideas.
Wholesalers call on advisors all around town. They have a good overview of prospecting strategies are working for other advisors. They share best practices.
2. How to succeed (1). Newer advisors can benefit too. Wholesalers see the newbies all around town. Some wash out. Others don’t. When a newer advisor explains their “sure fire” idea, they can share history from other advisors.
Wholesalers can say: “I know someone who tried that. Here’s what went wrong. Here‘s what you need to do to get it to work...”
3. Portfolio managers, live. They tour the country, often with wholesalers. They might be in town to meet with executives at a company in their fund. They are often rock stars to clients. They are mortal, needing to eat like everyone else.
Wholesalers who are proactive can line the up for dinner, inviting an advisor and a few of their clients to break bread together. I’ve seen a health fund manager dine with a few doctor clients. It’s quite a fascinating conversation.
4. Strategists, remotely. When the market is volatile, a firm’s chief strategist will often host a webinar. The advisor gets an additional point of view. More important, the advisor can ask questions via the videoconferencing app.
Wholesalers make it possible to tell a client “I know you were concerned about (topic). I was on a call with their chief strategist. I asked that question on your behalf...”
5. Continuing Ed (1). Advisors need to earn CE credits. Many money management firms offer classes advisors can attend, often remotely.
Wholesalers can make it easier for advisors to get the credits they need.
6. Continuing Ed (2). Other professions require continuing ed to keep their licenses current. CPAs are a good example. Many money management firms have developed CE credit classes specifically for these audiences.
Wholesalers can provide and often deliver, CE credit courses for an audience the advisor assembles.
7. Client/prospect dinners. For decades, wholesalers have offered some advisors the opportunity to host a few clients, each bringing a prospect for dinner in an upscale local restaurant. No hard sell, just a getting to know you event.
Wholesalers, in their affiliation with the money manager, share their firm’s views on the market and the economy.
8. Financial support. The advisor might be planning a client appreciation event. They may have a prospecting strategy needing support.
Wholesalers may be in a position to put their firm’s money alongside the advisors in support of the event.
9. Accountability. Sometimes a fund or money manager underperforms. Clients are upset. The advisor needs answers.
Wholesalers can explain why funds or managers got those results and what they recommend as next steps.
Clients work with advisors because they want the benefit of professional advice vs. “going it alone.” Good wholesalers can provide similar backup for advisors.