BLOG. 3 min read
Over the past several years, important buy and sell decisions have increasingly been centralized within research/due diligence teams at every major distributor. During this time, the reach and influence of these teams have grown dramatically due to advisors’ increasing reliance on recommended lists and models for investment selection and monitoring, as well as continued platform rationalization and fee compression triggering a trend toward fewer available fund families and funds.
Aligning your firm’s distribution, marketing and product development efforts to the unique demands and needs of these teams has never been more critical and is no longer a suggested best practice, but a requirement for approval on their platforms and inclusion in their models and recommended lists. Our Productivity Insights survey investigates, at length, the factors driving approval and inclusion decisions. This blog post highlights several changes that asset managers can make today that, according to 24 broker-dealers and custodians, can immediately improve the quality of your engagement with these important distribution targets.
Research and due diligence teams have a strong preference toward the specialized coverage model with designated business and platform sales representatives and a responsive and knowledgeable national accounts manager dedicated to meeting the team’s demands. So how can your firm’s distribution organization distinguish itself from competitors when the differentiators of the past are increasingly table stakes? Let’s see what the research and due diligence teams had to say.
We asked respondents the most valuable and helpful thing a firm they work with does that all asset managers should start doing. The overarching through-line from the responses (shown in the graphic below) indicates what research and due diligence teams value the most are transparency, timely access and an understanding of their needs and demands.
Source: SS&C Research, Analytics, and Consulting, Productivity Insights Broker Dealer/Gatekeeper Research/Due Diligence Team Survey, 2020
Stop Doing This
We also asked respondents their biggest general complaint regarding how asset managers work with home office and due diligence teams. The overarching through-line from these responses (shown in the following graphic) indicates that what research and due diligence teams disapprove of the most are hard-selling, one-size-fits-all and transactional sales mentalities, product pitches that lack an understanding of/consideration for their business, and “check the box” interactions.
Source: SS&C Research, Analytics, and Consulting, Productivity Insights Broker Dealer/Gatekeeper Research/Due Diligence Team Survey, 2020
Benefits of Being a Better Partner
Being a better partner to these key decision-makers can benefit your distribution organization as much as the research and due diligence teams that you engage with. As discussed in our "Cost Effectively Growing Assets" whitepaper to achieve cost-effective asset growth, asset managers need to identify their best partners by analyzing distributors based on alignment, profitability, demand and quality of relationship. After this analysis, some asset managers may need to reevaluate and bifurcate their distribution, marketing and product development efforts targeting those research/due diligence teams that will require time and money. However, every asset manager truly willing to listen can make specific, attainable changes to their strategies today that would immediately improve the quality of their relationship with their partners and could potentially lead to a better ROI on their distribution expenditure.
For more detail on these topics, please read our "Cost Effectively Growing Assets" whitepaper or watch our "Key Steps to Cost-Effectively Growing Assets" webinar where we explore these topics.
