Allocating financial advisor relationships to specific salespeople is nothing new. Traditional principles of territory design dictate that the most senior salesperson in the territory (typically the external wholesaler) faces off against the advisors who represent the strongest opportunities for the firm. The internal wholesaler meanwhile faces off against a different set of advisors, often including emerging relationships that the firm is looking to grow. But what if asset managers could match salespeople to advisors, not only based on seniority and opportunity, but also on which salesperson fits best with the advisor’s investment style, business model, and even personality?
Leading asset managers have begun to incorporate advisors’ investment styles and behavioral factors into their segmentation and engagement models, optimizing their territory design using data-driven insights. Firms are using these insights, not only to decide which advisors should be targeted, but also to help wholesalers understand how to target them with the right message, using the right medium, at the right time. The logical next step for distribution leaders is to apply the same analytical rigor to their sales teams, so that Sales can also target advisors with the right wholesaler. Historically, rigid territory boundaries would have made this kind of targeting very difficult, even if the data had existed to enable it. Today, however, many firms are shifting towards a more flexible, nuanced sales coverage model, which lends itself naturally to a sales force segmentation approach.
A Sales force segmentation approach would still factor in opportunity as an important criterion (for example, matching the most experienced salespeople with the most valuable advisor opportunities), but it would also help firms increase the chances of matching advisors with salespeople who relate to them and understand their business. For example, a gregarious and outgoing salesperson might not be the best partner for a quiet, analytical RIA, while an advisor who uses a lot of alternative products might be more willing to make time for a salesperson who has a deep knowledge of the alternative investment space.
With the growth of managed accounts and home office models, the number of advisors making their own investment decisions (and therefore, the number of advisors whose investment choices can be influenced) is shrinking; today, approximately two-thirds of advisor AUM is influenced by home office models. This makes it even more important for asset managers to build robust, lasting relationships with advisors based on mutual trust and respect. Adding Sales force segmentation to the distribution tool kit could help firms achieve this outcome.
Research, Analytics, and Consulting