When I began my career in this industry over a dozen years ago, the asset management and TAMP space revolved around its wholesalers. The multi-billion-dollar firm for which I worked had no less than 12 of them, each paired with an internal support team that usually consisted of two people. The firm itself employed well over 100 people at the time. This was an age before the industry had fully adopted the internet, when the local wholesaler reigned supreme and people were drawn to the IHOP for a lunch presentation. This was a time when marketing was called kits, and wherever a wholesaler went, so did a suitcase full of them.
The day I joined, the marketing "department" had one person. One. The primary mission of marketing was to simply support the wholesaler juggernaut, arming those in the field with devastatingly seductive kits. Customizable to the Nth degree with a one-sheet for every conceivable idea, plan or objective.
This was how it was supposed to function, but it’s not how it worked.
Wholesalers were treated like gods, magicians with microphones, and the more they were treated as such, the more they believed they deserved to be. Portfolio managers thanked them for making their jobs possible. Support staff worshiped the ground they walked on. Executive staff enabled them at every turn. And marketing kissed their ass. They didn’t innovate; they did as they were told. When a better way was found, it was immediately dismissed by the omniscient wholesaler.
After decades of success, it was expected that it would always be this way.
But as Bob Dylan once wrote, “The times, they are a-changin.” Wholesalers (apparently) have never heard that song.
Once a constant and impervious to change, today the wholesaler is a dying breed. What (finally) changed?
You could make an argument that the COVID-19 pandemic killed the wholesaler. But the truth is they were already on life support well before “the year that everything changed.” Gone are the days of conferences. Gone are the days of the presentation lunch. Gone are the evenings of raucous sponsored dinners with too many cocktails. And while those things will all return, in some undoubtedly mutated form, the wholesaler will not. So what happened?
The audience has changed. While there will always be a place for direct asset management products, the broad availability and widespread accessibility of TAMP platforms have rendered wholesalers obsolete.
What are they going to do? Take every advisor on the Envestnet platform out to lunch? Hold a Zoom? A webinar? How many “hey just wanted to check-in” calls can be placed before advisors turn off their phone? If I were writing this on Twitter, this would be the moment I would insert that GIF of Homer Simpson backing into the hedge. No one wants to be a part of this.
The entire communication game has drastically changed. In today’s world, people want to receive information on their terms, and when they feel like consuming it. Advisors may still sit through a wholesaler’s soliloquy from the stage, but they won’t be listening. They’re checking their phones, catching up on the news, texting, tweeting.
If change is the one constant in the universe, a universal truth is that time is valuable. Advisors don’t have time for a webinar, let alone a lunch. But watch a quick video, listen to a podcast, explore a short landing page, absorb quickly digestible content on one of the many strategies at their disposal? You bet.
The challenge is no longer sales but rather connecting advisors to that content. And the answer, is marketing: ads, landing pages, social media, PR and (yes) email. The interconnected web of finding clever ways to get your name and strategy in front of advisors where they are is what works.
That’s the internet folks, not the IHOP lunches.
COVID-19 didn’t kill the wholesaler, but the digital marketing-communications (MarComms) revolution did.
Wholesalers were once an elite unit that rose like the Phoenix, and then they were gone. Their legend has become but a whisper, told by the trees.
We believe it’s time to let go of legacy thinking about what is expected and start focusing on what’s not expected. Focus on being the first to do something, on being memorable. We currently working on a project that checks each of these boxes. Will it work?
We’re about to find out.
Our firm has already more than doubled in size in less than nine months without a single wholesaler, and the coffers are fresh with new revenue. Are we now going to build a sales team? No, but we are going to build an RIA that acts like a media company with a full-blown marketing agency inside.
Maybe we are just crazy or, maybe, by the beard of Zeus, we are on to something.
Christopher Norton is the director of marketing at Potomac, a turnkey asset management provider