Beyond the Cliché of
‘Consultative’ Wholesaling
Why top financial advisors aren’t seeing wholesalers as ‘consultative’ as
wholesalers think they’re being. And what asset managers can do to stop
falling short and instead help their wholesalers be advisor-centric.
September 2015
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Table of Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Key Takeaways From the Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Chapter 1: Managers Aren’t as Consultative in Selling as They Think . . . . . . . . . . . . . . . 7
Wholesalers on Why They Aren’t More Consultative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Chapter 2: Why Is ‘Consultative’ Wholesaling Important Anyway? . . . . . . . . . . . . . . . . . 12
Advisors Want Consultative Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Chapter 3: What Advisors Really Seek in the Best Wholesalers . . . . . . . . . . . . . . . . . 16
What Does a Top Wholesaler Look Like? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Chapter 4: Which Firms Have the Best Wholesalers (and Why) . . . . . . . . . . . . . . . . . . 22
What the Best Wholesaling Firms Do Better . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Chapter 5: Three Ways to Help Wholesalers Be More Consultative . . . . . . . . . . . . . . . . 27
1. Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2. Thought Leadership Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3. Access to Portfolio Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Main Recommendations for Action From the Report . . . . . . . . . . . . . . . . . . . . . . 31
Table of Illustrations
Figure 1: The 360-Degree View of Consultative Selling . . . . . . . . . . . . . . . . . . . . . 7
Figure 2: What Pct. of the Time Do Wholesalers Really Engage in ‘Consultative’ Selling . . . . . . . . 8
Figure 3: What Prevents Wholesalers From Being More Consultative . . . . . . . . . . . . . . .
9
Figure 4: Top 6 Challenges Facing Wholesalers . . . . . . . . . . . . . . . . . . . . . . . . 12
Figure 5: When Advisors Bring Wholesalers into the Decision Process . . . . . . . . . . . . . . . 14
Figure 6: Top Advisors’ ‘Inner Circle’ Wholesalers . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 7: Wholesaler Skills Most Important to Top Advisors . . . . . . . . . . . . . . . . . . . 16
Figure 8: Wholesalers on How Often They Exhibit Skills Prized by Advisors . . . . . . . . . . . . . 17
Figure 9: How Top Advisors Choose Between Similar Funds . . . . . . . . . . . . . . . . . . . 18
Figure 10: Quantifying ‘Top’ Wholesalers vs. ‘Average’ Wholesalers . . . . . . . . . . . . . . . . 19
Figure 11: Top Wholesaling Firms According to the FT 400 . . . . . . . . . . . . . . . . . . . 22
Figure 12: Top Wholesaling Firms According to the FT 300 . . . . . . . . . . . . . . . . . . . 23
Figure 13: Advisors Cite What Separates the Best Wholesalers . . . . . . . . . . . . . . . . . 24
Figure 14: Wholesalers vs. Sales Executives on Training Preferences . . . . . . . . . . . . . . . 27
Figure 15: Wholesalers’ Preferred Marketing Support . . . . . . . . . . . . . . . . . . . . . 28
Beyond the Cliché of ‘Consultative’ Wholesaling | September 2015
Executive Summary
The asset management industry has talked for years about “consultative” wholesaling. The wellworn phrase has become something of a cliché even though it has no official definition. For better
or worse, consultative selling — where the wholesaler becomes a strategic partner to the financial
advisor — is what financial advisors really want.
Unfortunately, asset managers are not being as consultative as they think they are. While asset
management sales executives contend that their wholesalers are consultative 100% of the time, top
financial advisors say that on average, fewer than 20% of wholesaler interactions are consultative.
This report goes beyond the cliché of being “consultative” to explore what consultative selling
really involves and why it’s important.
One of our key findings is that top financial advisors across the broker-dealer and RIA channels
have some strong opinions on what sorts of skills they want to see in wholesalers and these include
understanding their business and being consultative (rather than just product-focused). It’s difficult
to consistently exhibit those skills; just over half of the wholesalers we surveyed estimated that
they demonstrated those two skills at least 75% of the time. The good news is that wholesalers
who demonstrate their effectiveness can become part of an advisor’s trusted “inner circle.” Even
among top financial advisors managing $1 billion or more, nine out of 10 of them have a few
trusted wholesalers with whom they work closely.
There’s a genuine payoff, then, for wholesalers who are able to build advisor relationships by
being genuinely consultative. Being consultative is part of the mix of traits that distinguish the
wholesaling organizations that top advisors rank the highest — including BlackRock, JP Morgan,
Pimco and more.
Even many wholesalers admit that they are not being as consultative as they’d like. Fortunately,
many of the obstacles — proper training, time constraints, and others — can be addressed.
Asset managers have a number of actions they can take to help their wholesalers be more consultative and therefore more productive in the long run. These include assessing firms’ priorities in
“value add” and access to portfolio management staff, and rethinking how they support wholesaler
training. This report addresses three main research questions:
1. Are asset management firms really being as consultative in their wholesaling as they need?
2. What do financial advisors really want from wholesalers?
3. How can asset managers help their wholesalers build stronger relationships with advisors by
being genuinely more consultative?
— Loren Fox, Doug Dannemiller and Rita Raagas De Ramos, report co-authors
Beyond the Cliché of ‘Consultative’ Wholesaling | September 2015
Methodology
This report is based on proprietary surveys of four main audiences conducted by Ignites Distribution Research:
1. For the perspective of asset management sales executives, we drew on several surveys
over a period of time. These included two surveys in 2014: the first covered national sales
managers at fund firms managing a total of $780 billion in long-term assets; the other main
survey addressed distribution executives from 31 firms representing over $2.4 trillion in
AUM in long-term fund and ETF assets. In addition to the surveys, many of these executives
participated in follow-up conversations with us.
We solicited the opinions of elite financial advisors through multiple surveys of two groups of
advisors:
2. The Financial Times 400 Top Broker-Dealer Advisors: a list of top broker-dealer advisors
from across the U.S., mostly from wirehouses but also from independent and regional
BDs. The “average” FT 400 advisor manages $1.3 billion in client assets and has 25 years of
experience.
3. The Financial Times 300 Top Registered Investment Advisors: a list of elite, independent
RIA firms from across the U.S. with “average” AUM of $2.8 billion per firm. At the time of
the surveys, the average FT 300 firm was in existence for 24 years.
We also conducted follow-up interviews of roughly a dozen of these financial advisors.
Both groups’ members applied for inclusion in the lists, which were published in the Financial
Times. As a Financial Times service, Ignites Distribution Research conducted the rankings and was
given exclusive access to survey these advisors. It is important to remember that these advisors
are more experienced and have more AUM than the average advisor. The FT 300 and FT 400 are
snapshots of the leading retail-oriented advisors and are not representative of all financial advisors.
4. To get the views of wholesalers in the field, we surveyed 125 external wholesalers of mutual
funds and ETFs in March 2015. The respondent wholesalers represent 72 different asset
managers, and they have an average of 13 years of experience as external wholesalers. We
augmented that survey with additional conversations with individual wholesalers.
© 2015 Money-Media Inc. All Rights Reserved. Reproduction and distribution of this publication in any form without prior
written permission is forbidden.
Beyond the Cliché of ‘Consultative’ Wholesaling | September 2015
Ignites Distribution Research: Actionable intelligence on selling
through retail advisors
Our proprietary surveys are complemented by interviews with key executives, analysis
of third-party data, and the knowledge of our own expert analysts to help think through
strategic questions.
Proprietary surveys we’ve
fielded include:
• National Sales Managers
• Elite RIA firms (FT 300)
• Elite Broker-Dealer FAs
(FT 400)
• Heads of National/
Key Accounts
• Broker-Dealer Gatekeepers
• Heads of Marketing
• Heads of Distribution
• Fund/ETF Wholesalers
• Heads of Internal Sales Desks
Subscribing clients include:
• Ameriprise Financial
• BlackRock
• Broadridge Financial Solutions
• Delaware Investments
• Fidelity
• Invesco
• Morgan Stanley
• OppenheimerFunds
Personnel
Doug Dannemiller is Senior Research Analyst at
Ignites Distribution Research. He was previously an
independent researcher in financial services. Prior to
that, Doug was a VP at Fidelity Investments, focused
on research and strategic marketing. Doug earned
his BS from the Georgia Institute of Technology and
his MBA from Emory University.
Contact Doug at [email protected]
Rita Raagas De Ramos is US Research Manager
at Ignites Research, where she is part of the
Distribution and Retirement services. She was
previously the Managing Editor of Ignites Asia, and
before that worked at Dow Jones Newswires, UPI,
and elsewhere. She earned a BS from the University
of the Philippines. Contact Rita at [email protected]
Loren Fox is Director of Research at Ignites
Research. He had been a senior research analyst
at Strategic Insight. Prior to that Loren was a
journalist, working at Institutional Investor and
elsewhere. He earned his BA from Johns Hopkins
University and MS from Columbia University.
Contact Loren at [email protected]
• Thornburg
• Vanguard
• Many more
For information on subscriptions or single-report purchase,
please contact Ben Northover at [email protected] or 212.542.1291
Beyond the Cliché of ‘Consultative’ Wholesaling | September 2015