Some good news for asset managers is that the pool of sales in the intermediary market is growing. From our WalletShare consortia, we can see that gross sales have been increasing year-over-year for the last couple of years in both mutual funds and separately managed accounts (SMAs). Further positive insight is that our survey data, conducted in association with Horsesmouth, shows that advisors still place tremendous value on in-person relationships.
While it is comforting that asset managers have a growing market of total distribution opportunity and high impact from their most valuable sales resources (field salespeople), access to advisors continues to become more elusive. The pool of time that advisors are willing to spend with asset managers is not growing (and may be shrinking). The implications from this are that asset managers should create strategies around building “time share” with advisors and consider how prescriptive selling can play a role alongside the consultative approach the industry has embraced.
An Advisor’s Time is a Finite Market
We know advisors want to engage with their favorite wholesalers, but we also know the number of favorite wholesalers is shrinking. Our most recent Engagement Survey of financial advisors found that advisors had in-person meetings with an average of 6.4 different wholesalers per year, and only saw an average of 2.8 wholesalers more than once a year. These numbers may be slightly lower than reality, but it’s likely that these are the number of wholesalers that advisors remember meeting, which isn’t really a silver lining.
In this environment, how do you take time share from a competitor when you are not one of the 2.8 core wholesaler relationships? It may mean changing how you expect to provide value in the meetings with advisors.
Prescriptive Selling Moves Beyond Product-Pushing
Consultative selling works, but this typically takes many engagements and time to establish. In this era where the share of time has become more precious, you may only get one chance to make an impression on an advisor. That opens the door for more prescriptive selling alongside consultative outreach.
In the time share economy, prescriptive selling demonstrates that you know something about a prospect (or low-volume advisor) and offers personalized outreach based on something that the advisor has an interest in at a given point in time. This can work well with either an initial outreach to a prospect or as a follow-on idea for an advisor with whom your firm is already working.
Prescriptive selling is now better positioned than ever before—from the information on advisor preferences to dynamic segmentation to the use of AI to prepare for meetings. Bringing these elements together can lead to a valuable meeting for both parties. After all, prescriptive selling is not product-pushing, but rather the suggestion of a product that may help the advisor better create client solutions at a given point in time.
Here are some recent approaches that asset managers are using to facilitate a more structured approach to prescriptive meetings:
- Meeting preparation—Documentation provided to wholesalers on the background of an advisor’s practice, investing activity, broker-dealer initiatives and product suggestions have come a long way in just the last year. Good meeting preparation also includes a clear indication of the rationale behind a product suggestion, and not just a black-box score. By leaning on AI and the aggregation of data points across various sources, this insight can lead a wholesaler to lead with prescriptive ideas with confidence.
- Suggested agendas—Meeting requests are being sent with a suggested agenda, based on information that the asset manager understands about the advisor. AI can play a central role in not only making these suggestions, but also in preparing emails written in the voice of the wholesaler.
- Dynamic segmentation—Prioritizing engagement with advisors at the right time is now a reality due to more holistic views of advisors and AI tools. Dynamic segmentation goes beyond advisor value and aligns outreach at times when advisors are most likely to be responsive to suggestions. Dynamic segmentation is covered in our "Clearing the Clutter in Intermediary Distribution" whitepaper.
The competition over getting time share with advisors is only going to get more intense and asset managers should think about how to gain advantages through their intelligence on individual advisors by weaving in prescriptive selling as another tool.
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