NEW YORK, September 5, 2006 – As the distribution of investment management products has evolved from a relatively straightforward, primarily relationship-driven business to an increasingly complex, quantitatively oriented, “institutionalized” one, asset management firms’ National Accounts teams must learn to navigate a new series of bottlenecks with their distributors or risk misallocating resources and losing sales, according to a study released today by kasina, a leading consultant to the asset management industry.
The report (“Breaking the Bottleneck: Achieving Distribution Success by Supporting Gatekeepers’ Needs”) centers on recommendations that asset management firms’ National Accounts groups can use to clear three common bottlenecks:
Loss of shelf space opportunities: By not understanding research teams’ decision-making process, data needs, and delivery preferences, firms are jeopardizing consideration for product screens and shelf space upgrades.
Untargeted sales and marketing materials: By not working closely with partner coordinators, firms are flooding distributors with materials that have little or no chance of ever reaching the financial advisors.
Ineffective product development efforts: Without an understanding of the broader needs of distribution partners, firms are developing products in a vacuum, ultimately contributing to the glut of unused products.
“Asset managers have been slow to adapt to the changing demands of their distributors,” said Lee Kowarski, principal at kasina. “By not properly supporting the needs of their distributors’ research teams and partner coordinators, the investments being made in sales, marketing, and product development are wasted.”
The kasina paper provides sixteen in-depth recommendations to help asset management firms effectively support their distribution partners, including:
Speak the Analyst’s Language: Ideally, asset management firms should employ people with CFAs to interact with research analysts. Even if they choose not to do so, firms must train their account managers about products.
Understand the Evaluation Metrics: Increasingly, partner coordinators are building scorecards to gather data and information regarding the distribution support that asset management firms provide (e.g. wholesaler interactions, conference participation, etc.). Account managers should work closely with their counterparts to understand the criteria against which they will be judged.
Utilize Resources at Distributors to Aid in Product Development: National Accounts groups claim that they want to be partners with the firms that distribute their products and not simply act as vendors. These same firms, however, rarely include distributors in their product development process. Firms must work more closely with distributors to identify market needs and develop products accordingly.
“While most asset managers feel that they have effective relationships with their partners, there are many steps that they can take to deepen the relationship,” said Kowarski. “The purpose of this paper is to show asset management firms how they can stop being viewed as a vendor and become a true partner. We believe that a huge business opportunity exists for firms that can effectively break the bottlenecks.”
As part of the research for the study, kasina conducted in-depth interviews with “gatekeepers” (research analysts and partner coordinators) at ten leading distributors, including wirehouses (Merrill Lynch, Morgan Stanley, etc.) and other broker/dealers, banks, and independent networks (Bank of America, Charles Schwab, LPL, etc.).
The full kasina report, “Breaking the Bottle Neck: Achieving Distribution Success by Supporting Gatekeepers’ Needs Online,” is available for purchase at: www.kasina.com.
kasina is a management consulting firm that is focused on innovating distribution within financial services. By combining knowledge of distribution trends, technological innovations, and marketing strategies, kasina aids leading asset management firms with front-office efforts and publishes a regular schedule of cutting-edge industry research. kasina’s client list includes 18 of the 20 largest asset managers in the United States and leading firms in Canada, France, Germany, and the United Kingdom.