Advisers typically are encountered by wholesalers from fund companies on an almost daily basis. Whether wholesalers are simply looking to schedule meetings with advisers, or they're actually sharing new and relevant information with advisers, there are a number of different ways wholesalers can help actually serve as partners with advisers.
At the same time, there are scores of ways that wholesalers can turn off an adviser and potentially land themselves in the penalty box.
InvestmentNews has canvassed a number of advisers for their thoughts on how wholesalers can more effectively serve the financial advisory community – and also, what wholesalers should almost
never do when working with advisers.
(Click here to view the full list of definite “Do nots” and
click here to view the full list of “Do's”)
Eight surefire ways for wholesalers to land on advisers' blacklists
8. Scam the system
At Flynn Zito Capital Management, an independent advisory firm with $250 million under management, the voicemail system prompts wholesalers to e-mail the firm, not letting them leave a message. “If they shirk the system and call and pretend to be a client, that really annoys us,” said Doug Flynn, partner and co-founder of the firm. “We have a database of all of our wholesaler contacts and that gets noted next to their names.” Some people might think we are blowing them off, but we do actually read the e-mails,” Mr. Flynn said.
7. Do the same dance to a different song
“Some wholesalers come in with a business card from company XYZ, and six months later it's company ABC. Then they try to say this new fund is the biggest and the best, when six months ago they were saying the same thing about a different fund.”
—an adviser who requested anonymity because he isn't authorized to speak to the press
6. Don't listen, just sell sell sell
“Be a business partner, not a wholesaler. The quickest way to get on the blacklist for me is to not listen and offer products that do not fit the advisors' needs.”
—Matthew J. MacEachern, Fund Manager at EAS Genesis Fund, via LinkedIn
5. Tell the adviser last
"Biggest Mistake: not letting us know about a significant change to the fund prior to it becoming public knowledge, for example: change in the portfolio manager or the fund closing to new investors."
—Preston Byers, CFP, CPA, President of ClearBridge Wealth Management, via LinkedIn
4. Make yourself right at home
"The worse thing that a wholesaler can do (have done in my experience) is to just open the door to my office, walk right in, set his/her briefcase on the floor, drops some brochures on my desk and sit down in the chair across from my desk and begin talking...while I was on the phone with a prospective client! Needless to say, that guy got kicked out of my office."
—Martin A. Smith, RPS, AIF, AIFA, President of and Investment Advisor at Wealth Manager, via LinkedIn
3. Spin a negative as a positive
"I'd rather not hear them bad-mouth their competition. Find a way to tell me what's good about your product or service, not what's bad about someone else's."
—Gary Silverman, CFP, Founder of Personal Money Planning, via LinkedIn
2. Show up unannounced
"Dropping by without an appointment is a sure sign of an amateur."
—Don Purcell, Financial Planner, via LinkedIn Spin a negative as a positive
1. Tell yourself that 'no' really means 'maybe'
The three partners at Fox Joss & Yankee LLC crafted detailed procedures for wholesalers to follow and they will listen to wholesalers' pitches. But if they've said no to a wholesaler because the product doesn't match their investment philosophy, they don't want to see that person pitching the same product again.
“We will tell them you'll never sell us anything,” said adviser and partner Daniel J. Joss. “We cut right to the chase. This may be a turn off but it saves us time. We try to be upfront and honest.”
When Mr. Joss gets e-mails from these wholesalers, he automatically deletes them. “At some point, I may have someone tell them to stop calling us. It's hard to get on the black list, but we do have a process.”
And Mr. Joss is hardly the only adviser with this pet-peeve:
- “After being told no I have had many wholesalers continue to call me and try and ‘talk me into changing my mind'. I stop taking their calls.” —Jeff Spears, CEO at Sanctuary Wealth Services LLC, via LinkedIn
- “The worst thing he/she can do is to continue to bug me after being told ‘NO!'” —Thomas Grzymala, CFP, AIFA, Principal and Securities Expert Witness at Forensic Analytics LLC, via LinkedIn
Five ways wholesalers can impress advisers
5. Offer industry insight
Wholesalers who provide potential customers with market intelligence usually impress their audience. Terrence Morgan, an adviser and owner of OK401k, looks at every visit as information-gathering about the industry. “We look at wholesalers as a wealth of information,” he said. “I don't care if a guy has moved five times in five years. He can tell me information. We pick their brain for information.”
4. Provide educational resources
Advisers don't have time to track down every book, article or conference that relates to their business. Within reason, wholesalers can help fill in the blanks. Martin Smith, an independent adviser who just started his firm Kingdom Trust Capital Management, said he likes it when wholesalers offer books to read about the industry or point out seminars featuring well-known speakers. “Don't send me a bunch of junk mail I'll never use,” he said. “I learned about a few decent books from wholesalers. One guy sent me a book on retirement plan prospecting.”
3. Ask intelligent questions
Don't be afraid to ask advisors about their business. Indeed, wholesalers who ask good questions are appreciated by Rich Arzaga, founder and chief executive of Cornerstone Wealth Management Inc., which manages about $25 million in assets. “If they know their product and understand my market and how the two can fit together, that's great,” he said. “Their communication skills and ability to ask good questions can set them apart from the others.”
2. Make sure the product hits the target
Michael Kitces, an adviser with Pinnacle Advisory Group Inc., which manages about $650 million in assets, said he wants wholesalers to be able to identify a problem that he currently has in his business — and then offer up a way to fix the problem.. “No one wants to end a conversation with someone who is saying they'll make their life better,” he said. “If you tell me you'll make my life better and I believe it's credible of course, I want to continue that conversation.” [Photo by Candice Courtney]
1. Do your homework
It helps a great deal if a wholesaler has done some homework and knows a little bit about the adviser's firm. Pinnacle Advisory's Mr. Kitces says he's impressed when wholesalers call him and know about the types of clients his firm serves and the types of products they usually sell. “Certainly, we all want to feel special,” he said. “If someone's done research on my firm, I'm appreciative that they've done their homework about my business before they've even contacted me. I'm a human being. I can't help but feel flattered by that.”
InvestmentNews reporters Hilary Johnson, Lisa Shidler, and Jessica Toonkel Marquez contributed to this story
