Is Wholesale Distribution A Good Career Path

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Globally, financial advisors are expanding the breadth of their services and deepening their relationships with clients. Also, there is a trend for advisors, instead of finding the best deal, to seek to develop close relationships with a select few asset management partners. To protect their important distribution channel of advisory services, wholesalers must adopt a digital mindset, improve organization, rethink current advisory flows, and take advantage of modern technologies to achieve operational advantages and provide services added new value to sales staff, consultants, and customers. In a series of articles, we will concentrate on the technical part of this story and look at some of its important features, which have proved essential to the success of the implementation. Wholesale Distribution Workflow A collection of high quality investment advice that has been growing over the years. Services that were once available only to the wealthy have been democratized for a less affluent audience. This raises the bar for any advisor at all levels of wealth and sophistication. High-quality advice is about getting the broadest 360-degree view of an investor’s finances, and in particular a complete view of the investor’s family bonds, their portfolios, their risk profiles, investment limits and investment destinations. In addition, clients demand more complex services, such as financial, tax and estate planning. In short, consultants are moving from purely product-oriented to solution-oriented sales and consulting processes. Investment advice is not about finding the best product – advice is about finding an integrated solution to the investor’s needs. This obviously means that individual investment products—unfortunately for many wholesalers—become highly volatile. With this change, the questions consultants ask their wholesalers naturally become more complicated. They need investment knowledge beyond simple market presentations. However, wholesalers’ sales forces are often not well prepared to meet these demands. While all are experts in their product areas, few have the capabilities to handle more complex needs, such as advanced portfolio construction or financial planning services. Since high-value services are not only more demanding from the communication point of view, but also from the data, analysis and computing side, it is clear that technology plays an important role. Simply no human being can perform sophisticated mathematical optimizations without any technical support. This is one of the reasons why many wholesalers have started to form specialized groups. These groups are not only responsible for building and maintaining their internal tools (for example, portfolio building), but also use their tools to meet the advisor’s requirements. Many wholesalers are currently taking these exact services to a new and more advanced level by supporting their teams of experts with advanced analytics platforms. After working with tons of wholesalers to develop different platforms for next-level wholesale, we want to share some insights and best practices. In our experience, today’s wholesale distribution platform has at least the following seven key features: Source: FactSet Let’s take a closer look at each of these features, but note that only a combination of them, and preferably all of them, will work. allows you to achieve significant results. Data-driven and evidence-based Today’s investors don’t want to see investment decisions based on gut feeling, but rather expect decisions based on empirical evidence. The new generation of wholesalers and consultants should understand their role as sparring partners for customers, providing guidance and helping to interpret measured decisions. Accordingly, the key element of the entire platform is the analytical engine, where much of the firm’s financial knowledge resides. Modern platforms based on API modules allow existing quantitative expert groups to present their knowledge to the rest of the world by easily configuring basic software modules. These analytical software modules help to close the existing gap between the strong investment potential found in professional teams in their home office and the knowledge available in the sales field ie. wholesale relationship manager and friendly consultant. The latter is a very simple task when analytical precision is combined with flexible and simple workflows, which hide the underlying complexity from unsophisticated users. Potential components of a basic module Source: FactSet The image above is an example of a possible configuration of such an analytics platform for marketers. Of course, many specialized software vendors can provide tools for quantitative calculations; some are more advanced, others do not require computing, but compared to the current average market standards, almost all can provide better data-driven insights. However, analytics alone are not enough to achieve sustainable market success. There are several other equally important driver keys. What is certain is the consistency of the data. Data consistency means that all layers of the overall platform work on the same data set and analytics. For example, a portfolio manager in a home office will have access to the same product data and portfolio analytics as a sales force. Modern API technology stacks enable easy and cost-effective integration of different systems with graphical user interfaces such as computers, tablets or mobile phones. This means that the same information can be exposed to external advice and their potential customers. Another important factor is the integration of these computing modules into recognizable, easy-to-use and targeted workflows. These workflows not only have real estate investment knowledge as an important element, but also allow the seller to display and publicly advertise the product. This is exactly what makes a significant market difference for the implementation industry, and no software vendor will be able to succeed alone. Moreover, it is also a critical task, which many software vendors with outdated monolithic infrastructures cannot achieve. A modular API-first approach is clearly a strategic imperative for today’s IT systems and enables future extensibility. In short, evidence-based quantitative computing power is scarce unless it is fully embedded in a highly differentiated, brand-driven and customer-centric strategy. The latter alone is a solid foundation for the business activities of the new technology that we want to explore here. Balance and Flexibility As margins continue to decline, engagement with the entire value chain should be key for management. Therefore, advisors must be able to perform the standard requirements as well as possible, while at the same time dedicating enough time to investigate more challenging investment cases. It also includes the ability to expand your business to a large number of potential customers. We have repeatedly seen groups of wholesale professionals, in their need to meet the more demanding requirements of consultants, work to set up their own internal tools. Often these internal tools are based on Excel and VBA and have evolved over time. There is nothing wrong with this method, at least in the beginning. Excel is also the most financially viable activity and the perfect way to start and grow quickly. However, Excel and many other native tools lack power, scale, and flexibility. When it comes to the power of results, Excel’s ease of use and overall convenience is a nightmare. Are you sure your Excel sheet is free of errors? If you are now, I will ask you again in six months. A number of possible sources of error are significant. Without safeguards, there is no way to be sure of the accuracy of your analysis. These types of mistakes can quickly become very expensive. Scalability comes with automation, and automation comes with openness. In terms of size and flexibility, the picture is not very good. In fact, many in-house teams are struggling with a sheer (and growing) number of questions. With many consultants seeking guidance from wholesalers, the number of analyzes (eg, portfolio reviews) easily reaches hundreds per week. Since the creation of similar analysis reports involves manual work and often the involvement of experts, the current processes are not improved. Scalability comes with automation, and automation comes with openness. To deliver a useful measure and also create the greatest possible value for the customer, wholesalers must ensure that inexperienced consultants or relationship managers can also interact with the security system and produce quality results. This requires user interfaces to keep the basic complexity of the system, while still having the flexibility to dig deeper if necessary. Some implementations of advanced analytics tools do not meet the set expectations because many very complex tasks are exposed to end users, which require a lot of training and constant consultation. As a result, it appears that many users are reluctant to use the system – sometimes less is more. Openness and Interactivity Openness and interactivity describe the characteristics of a modern, wholesale-centric workflow platform. Revision of existing sales flows involves defining the required data flows such as user and system communications. Let’s take a look at some examples of what openness can mean in practice. One example is where wholesale