kasina Finds the Majority of Sales & National Accounts Compensation Plans Fail to Drive Profitability

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New study provides philosophy and framework for managing compensation, as well as benchmarking data for nine Sales and National Accounts positions

New York, (September 07, 2011) – Firms are not using compensation to drive profitable behavior and results, according to kasina’s newest study: Excellence in Distribution: Optimizing Compensation to Drive Profitability. Specifically, kasina found that firms are not effectively incentivizing the best performers, managing out underperformers, retaining key personnel with significant long-term or deferred compensation, or rewarding salespeople for balancing sales across products.

“Firms should look to rationalize levels of compensation by role and level of experience,” says kasina Principal, Lee Kowarski. “Despite the shortcomings of many compensation plans, we are seeing some positive trends. Firms are narrowing the compensation gap between Sales and National Accounts, increasing Hybrid Wholesaler compensation as a result of high sales productivity, and moderating External Wholesaler compensation by keeping pay flat. Compensation needs to be used strategically and must be aligned with firms’ objectives – unfortunately, this is often not the case at asset managers and insurers.”

The kasina report includes analysis of data garnered from surveys and interviews with executives from seventeen firms covering 850 data points from each respondent. The report provides benchmarks for nine Sales and National Accounts positions, best practices and recommendations, and diagnostic tools to evaluate compensation philosophy and plans.

Among the biggest changes from prior years are:

  • 71% of firms used bonuses to reward field wholesalers in 2010, compared to 54% in 2009
  • Internal wholesaler pay is projected to decrease despite added sales responsibilities
  • Rather than differentiating pay appropriately, the gap between top- and bottomperforming wholesalers narrowed to $474,500 from $546,500 in 2009

For more information on the full report, Excellence in Distribution: Optimizing
Compensation to Drive Profitability, or to learn about kasina’s other studies, visit www.kasina.com/reports.

About kasina

kasina’s commitment to innovating distribution in the financial services and insurance industries 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 total assets under management in the US. An overview of services offered by kasina is available at www.kasina.com.