March 7, 2013

Advisers face barrage of mutual fund pitchmen

by Dan Sondhelm

The Wall Street Journal this week published a story featuring the barrage financial advisers face from mutual fund wholesalers every day, despite the possibility that wholesalers aren't being as effective as they could be in their interactions with advisers.

Legg Mason, for example, "dramatically" increased its sales team to 40 wholesalers, with 23 in metropolitan areas and the others in nonmetropolitan areas. Its wholesalers are now armed with iPads and a "special Legg Mason app" that provides "information about the company funds at their fingertips."

"The bar to get into this game is rising," said Tom Hirschmann, head of U.S. sales for Legg Mason. "This was about getting the maximum number of people on the street and finding the best way to work with advisers." Advisers apparently like the approach as year-to-year sales have increased 14%.

A big fund firm with deep pockets, a strong brand, and existing adviser relationships "helps open the doors--and get phones picked up," according to the article.

But advisers are pushing back.

One broker from Wells Fargo says he "limits the number of calls he takes per week" and instructs his assistant to "prevent these callers from getting through."
Another broker from Morgan Stanley Wealth Management says he "confronts" every wholesaler who steps in his office with breakfast or lunch invitations with one time-saving question: What is your best fund idea?

For most, the best solution is to "simply ignore as many wholesalers as possible."
So what can your mutual fund firm do to build relationships with advisers without being too aggressive to get the attention you want?

Strenthen the skills of your wholesalers. Firms such as Interactive Communications will work with your sales team to make them more effective and efficient. The firm also writes one of my favorite blogs with tips and strategies.
Give your sales people a reason to call on advisers. Timely thought leadership information from your fund managers such as press coverage on a fund, proprietary research, Webinars, and educational videos can give the wholesaler a reason to call on an advisor one more time.
Be where your advisers are. Most advisers read major news publications in print and online, attend industry conferences, are on LinkedIn, and use the Internet for research. Develop a strategy to be active in these areas.
Include your portfolio manager. The sales team is important, but most advisers want to communicate with the person managing the fund. Bring him to meet advisers at a conference. Let him appear on business television. If he isn't willing or comfortable, take a look at the article published in Money Management Executive for my tips to enhance the role fund managers play in sales and marketing.


  1. Good Stuff Dan! I might add, provide Advisors with a practice management solution to growing and retaining their client base. I am working with an asset management firm that has put me in front of 700 FAs in the past six months, mostly one-on-ones, where we are discussing and creating individual strategies for them to leverage social media.

    Your spot on recommending Interactive Communications! Great team and better results.


    1. Bruce, good addition on practice management. I might have to do a story on it. Do you have a relevent article you might want to contribute?