By Simon Hoyle
Investment product manufacturers and broker/dealers are producing ever more content to support practice management. Advisors evaluate product information via advanced online research engines. Wealth management offices routinely employ dedicated investment researchers in house. Some will only hire those with the coveted CFA designation. This is driving investment companies, custodians, and b/d's to regularly provide support in various formats on DOL compliance, cyber security and social media marketing. As our regulatory environment emerges from its metamorphosis, so does the landscape in which we provide client facing support.
Top advisors engage wholesalers' participation as an integral component of their business plan for the year. It's an opportune time to ask direct questions about their stable of advisors. How are their most successful advisors growing? What do they see as best practices? What are the top three marketing activities in use? Are they connecting with their clients on LinkedIn, Twitter or Facebook? What's their focus? What makes them different? What did your clients' biggest success stories look like this year? How are they positioned for the fiduciary rule?
Sadly, many advisors squander the impact a seasoned financial wholesaler can bestow on their practice. If you're not leveraging their expertise and network, you should consider taking another look. They play host to important business details, such as succession planning and b/d transitioning. One wholesaler has delivered over 500 presentations on how to maximize Social Security benefits. Determine where your wholesalers shine above paradigmatic expectations and take note.
The Deterioration of Value Perception
Traditionally wholesalers have been associated with product expertise, amiable dispositions, and impeccably polished shoes. Remember the $100,000 toaster story from the '90s? It recounts the opportunity cost of opening a low-interest bank account instead of investing in great performing mutual funds.
The "wholesaler as product pusher" concept still lingers to some extent. This stigma led to some advisors' practices devising nefarious systems and processes to avoid the dreaded wholesaler contact. Some practices dedicate voicemail options for these rabble-rousers: "If you're a product representative or third party vendor please press 3 now." Some practices limit wholesalers to an annual 15-minute round-robin presentation format.
The Service and Support Renaissance
Financial advisors have practice management specialists at their home office as handy resources. Adding fresh perspectives to your knowledge and perception base results in stronger business and service offerings. Investment companies have joined the fray by delivering social media webinars and “how-to” guides on Facebook and Twitter. We’re in the midst of a service and support renaissance.
One of my favorite success stories involves an established producer whose $15 million client referred a larger relationship. The advisor welcomed the suggestion to invite a reputed wholesaler to that meeting. He won the account and so began a relationship in which he and the wholesaler routinely sit on the same side of the table with remarkable results.
“A seasoned wholesaler’s experience, stories and advisor meetings are magnified in dog years,” said Jeff Nativi, regional director at SEI. “They see and hear from the best, worst, most efficient, struggling and all types of firms associated with various b/d's and RIAs. You can learn what’s working, create efficiency, foster growth and success. They're willing to share references, ideas and resources. Just ask.”
Transition Reconnaissance. Choosing the right b/d can propel a practice or send it down another track. Statistics indicate advisors can expect to partner with four b/d's on average during their career. If change is on the horizon, solicit feedback from these scouts. They absorb the vibes and pulse of advisor sentiment daily. They have a keen sense for b/d's aligned with representative satisfaction and those that don't. The minority reticent to provide direct recommendations will usually share a few names for consideration. Speak with multiple sources to determine common experiences. Wholesalers can run interference at their home office to ensure client accounts (and your revenue) move as smoothly as possible to your new firm.
Succession Planning and Practice Acquisition efforts benefit greatly with the addition of qualified prospects. Enlist your wholesalers' networks to maximize success. It's about references of quality versus the unknown. Reach out every few months to inquire about potential targets they've encountered. Wholesalers work with all shapes and sizes of practices from small to large and from plain vanilla to overtly complex. Having practice management discussions with multiple resources cultivates growth, akin to having an additional team member. Your introductions forge you as the indispensable partner. Good partnerships breathe mutual effort and respect, so keep them top of mind to foster reciprocity.
The next time a wholesaler leaves a message, don't be too quick to 86 them.
Simon Hoyle is director of business development at Securities Service Network, an independent broker/dealer in Knoxville, Tenn.