New York, (July 22, 2008) – After years as a buzzword, hybrid wholesaling has achieved the necessary adoption and track record to become a long-term part of asset management distribution strategies. Hybrids are up to 30% more profitable than traditional external/internal wholesalers, according to new research from kasina.
kasina’s latest report, “The Truth About Hybrid Wholesaling,” examines hybrid strategies’ impact on distribution and the competitive landscape. kasina analyzed 10 hybrid pioneers from across the industry, ranging from less than $10 billion to more than $300 billion in assets under management. The research showed that hybrid wholesaling made a measurable difference in cutting costs in Sales. For example, some of the findings from the report include:
- Hybrids generally earn less than one third of what externals earn.
- The expense budget for hybrids tends to correlate with their time in the field, leading to lowered costs.
- Though compensation and costs tend to be lower, the hybrid production rate is still relatively high, capturing 50-100% of the production levels of externals.
“The bottom line is that firms are extremely satisfied with the results,” says senior manager Mike McLaughlin. 80% of the firms analyzed by kasina cited the cost-effectiveness or higher profitability of hybrids as the primary benefit of the strategy.
kasina also notes that current hybrid model implementations vary widely among firms. Travel ranges from 20% at one firm to more than 60% at another, and hybrids cover specific channels, tier of advisors, or products in 50% of current models. Sourcing of talent, managerial responsibility, and compensation are also important issues where firms take distinct approaches.
For the long-term, kasina sees a trend toward the “Flex Model,” in which wholesaler roles exist along a more fluid continuum, enabling Sales to adapt to the shifting needs of distributors, advisors, and their own business strategies.
Get more information on the full report, “The Truth About Hybrid Wholesaling.”
kasina’s commitment to innovating distribution in the financial services industry has made it one of the most influential strategy consulting firms in its sector. kasina works with a wide variety of clients from five continents, including firms representing 90% of the U.S.’s total assets under management. An overview of services offered by kasina is available at www.kasina.com.