Fund managers like BlackRock and Invesco are shaking up the way they sell funds, updating pay and hi

Publish date: 2024-07-12
2021-08-16T13:37:10Z

The asset management industry's traveling wholesaler, crisscrossing states to meet with advisors and sell them funds, isn't going away entirely. You will start to find her more often at her computer, though, instead of the airport.

Just as remote work has forced financial advisors to take more client meetings over video, asset managers say they expect to hire more salespeople into hybrid roles that mesh in-person and digital interactions. 

Large asset managers expect to double teams of hybrid wholesalers, or those who meet with clients in person and virtually, from a median of five in 2020 to 10 by 2023, according to a report published last week by Cerulli Associates, a wealth and asset management research and consulting firm. They are also reassessing how wholesalers are paid and measured, linking bonuses to factors beyond gross sales as their roles evolve, per Cerulli.

It's a matter John McDonough, who leads US wealth management intermediaries distribution at Invesco, has had to sort through during the pandemic. There is generally a hybrid approach to meeting with clients, he said. 

"Having said that, my message back to our sales team is: nobody in this organization will be 100% face-to-face again," he said in an interview. McDonough said he has no current plans for solely digital interactions with clients, but that his team is monitoring clients' preferences.

Mapping out wholesalers' strategies is existential for asset managers, many of which rely on distribution to wealth firms to sell products. It is a crucial moment for these efforts, too, as most firms are devising new distribution plans to sell more alternative investments, Insider reported last month.

Companies are finding people don't want to meet much in person anyway. In its report, Cerulli cited a comment from a large, unnamed asset manager's distribution head who said in-person advisor meetings have been happening less often for years. Independently run wealth management firms, a growing population of advisors, are driving the push to ditch such meetings.

"We believe virtual wholesalers are no longer a 'nice to have,'" Chrissy Quinn, a national sales manager at BlackRock, told Insider. "It is now a 'must have.'"

Shannon Stapleton/Reuters

BlackRock's US wealth advisory business has 165 market leaders who oversee advisor relationships, which includes traditional external wholesalers and a 24-person virtual-only team.

"While there are tremendous benefits to virtual wholesaling, there will always be a demand for in-person engagements," Quinn said. "Finding the right balance between virtual and in-person will be largely driven by the needs of our advisors."

Changes to pay

Firms are reevaluating how they measure wholesalers' performance as travel and advisors' needs shift.

Asset managers are looking to link pay less to gross sales and more to big-picture objectives, like overall profitability, according to Cerulli. Bonuses tied to factors like their net sales and firm-wide profitability now account for 17% of wholesalers' target compensation; executives want to bump that to 41%, per Cerulli data.

McDonough has created new targets for his team's volume of meetings with clients over video, implemented in the last year to complement in-person meeting targets already in place for employees, depending on their location. 

Firms have made other distribution-focused adjustments as they are seen increasingly as consultants and specialists rather than salespeople. McDonough has generally done away with the term "wholesaler" altogether, he said, though that shift is years in the making. It "sounds like a simple shift, but it is all-encompassing," he said.

Watch: BlackRock's $1.8 trillion bond chief shares an epiphany he had that reshaped his entire economic outlook

ncG1vNJzZmivp6x7o8HSoqWeq6Oeu7S1w56pZ5ufonynwc2dZKaZnpa0pr7SZp%2BiqpmjtG7CyKurrpmcYsSpu8ueqpqklafAbr%2FApZysZZOkurGxzayYraGfo3qxrdhmmaWZk6C%2FsK%2FKZqCnrpWosLB5kWlpamVo