A new study based on a survey of financial advisors found that, when engaging with wholesalers, retail advisors expressed preference either for technology or old-school face-to-face meetings depending on their sales distribution channel.According to the survey, registered investment advisors (RIA) are more willing to engage wholesalers using technology, while full-service advisors in the wirehouse and independent broker-dealer channels prefer engaging through traditional face-to-face contact.
"Younger advisors are still looking for face-to-face contact, especially those in the full-service and independent channels," said Howard Schneider, principal of Practical Perspectives and author of the study on the changing wholesaler landscape.
"They are more likely to deviate based on channel, not on age," he said.
Simply mapping a technology model to reach a broker-dealer advisor or, conversely, just porting a full-service model onto tech-leaning RIAs, isn't going to work and there's no single model of success, Schneider said.
The research, distilled from an April survey conducted with 750 financial advisors working for national broker-dealers, independent broker-dealers, wirehouses and RIAs, also found that:
Successful wholesaling is very often driven by the individual wholesaler, not the firm's approach to wholesaling.
The volume of wholesaler outreach may be overwhelming for some advisors, especially from providers advisors don't currently work with.
Advisors want a more relevant and tailored approach to wholesaling.
The report sheds light on how advisors perceive and rely on wholesaling outreach from asset managers, annuity providers and other firms that depend on advisors for distribution.
Characteristics of Top Wholesalers
Advisors prefer wholesalers who respect their time, don't intrude and exhibit in-depth knowledge about their products as well as solutions offered by competitors.
Like many investors, advisors don't like surprises and told a solution doesn't perform "because it means a more difficult conversation with the client," Schneider said.
Pushy wholesalers touting their latest and greatest funds best stay away, said Kenneth Nuttall, director of financial planning for BlackDiamond Wealth Management, a New York-based RIA.
The soft sell is more effective and wholesalers are beginning to see that, he said.
If a conversation with a wholesaler ends with a subtle reminder to check out a fund, Nuttall relies on a Google search.
But the most valuable wholesalers are those who give him information he can't find on the Internet, Nuttall said.
Specialist wholesalers who represent specific types of solutions -- rather than generalist or unaffiliated wholesalers -- score higher among advisors, the research found.
Wholesalers with deep industry knowledge and who take the time to establish personal relationships and provide access to practice management resources enhance their value in the eyes of advisors, the report found.
Email and phone calls remain the most typical forms of wholesaler contact with more limited outreach conducted through digital approaches, the report found.