One thing was clear from RIA executives: the plans set in or before 2017 will continue into 2018 with deeper and more precise focus on reframing distribution models by focusing on the upfront value, looking at segments advisors they hadn’t previously approached and putting a concerted effort on building trust to encourage more lasting relationships with those advisors, and using data, leveraging technology, and rethinking the necessary roles and skills for members of their sales teams.
At the 2018 RIA Roundtable, RIA leaders expressed a need for broader or more specific product offerings, as well as changes to their team structures to better serve an increasingly institutionalized customer base. They have observed the benefits of expanded Business Intelligence (BI) within the broker-dealer channel and want to replicate those benefits for RIA within their BI programs. They are continuing to improve their understanding of customers through enhanced customer journey mapping, and have refined their focus on team structure and skill sets to include better integration with marketing and digital engagements.
Products and process
RIA sales teams are noting changes in their customers. From an increased institutionalization of the market to changes in the decision makers, they’ve recognized some necessary changes in how they should approach the market. Some are becoming more product-agnostic and focusing their attention beyond the investment side of the business to include practice management and portfolio guidance. Others are becoming more specific in their offerings to appeal to their customers by creating SMA offerings, for example. Others are experimenting with new fee structures.
RIA leaders are also changing how they approach the market, with more asset managers looking to digital and virtual coverage in some customer segments.
The biggest challenge to being able to effectively determine the right products and approach: data.
Data and business intelligence
In 2017, RIA leaders emphasized data and leveraging data to understand better why they do business with the firms they do business with. In 2018, the focus will shift to leveraging data to segment customers for targeting, and a better understanding of customer needs through journey mapping.
While RIA leaders recognize the benefit of applying data to targeting and selling activities, they were very clear that the availability and quality of data available for RIA is not yet as defined as it is for other channels – particularly the broker-dealer channel. The good news, however, is that now that BI efforts have improved on the BD side, many BI teams are now focusing on improving the data experience for the RIA channel.
Those who have business intelligence focused on RIAs explained that they’ve had to get creative about how to overcome areas of missing data and incomplete data sets. They have leveraged qualitative data collected through engagements with advisors to help make better sense of the quantitative data available to them for the channel.
Team structure and skill sets
With a refined view of their customer base – through better use of data and improved customer journey mapping – asset managers are looking at how to deploy their sales resources to capture best opportunities effectively.
Several asset managers have deployed digital salespeople – mainly to cover areas where it is not economical to have a salesperson in the field. One key to getting this right is the integration of sales and marketing – from a process, people, and data perspective. Understanding how advisors are interacting with digital assets helps salespeople to prepare how they engage when they meet in person more precisely. For those advisors that can be covered with pure digital efforts, marketing team participation in strategy and execution is critical.
Talent and skill sets are also a critical component to effectively selling in the RIA space. While some are focused on increasing the sophistication of their sales teams (requiring certifications, for example), others are focused on improving technology and data skills. The skill sets of internal sales were a particular focus. When recruiting for these positions, leaders have found that internals in other channels – such as the broker-dealer channel – struggle in the RIA space because the type of work differs (fewer phone calls) and the data and insights readily available to other internal desks is just not present for the RIA space. These leaders have had more success hiring from outside RIA desks.
2018 looks to be a continuation of strategies RIA leaders began implementing in previous years. The difference in 2018 is the depth of change in products, processes, teams, and skill sets. The biggest challenge to success for RIA leaders in 2018 may very well be the ability of the enterprise to implement better data for the RIA space, to integrate sales and marketing to enable digital efforts, and to find or grow the right talent to engage with more sophisticated advisors and those whose processes have become more institutional in nature.
Research, Analytics, and Consulting