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Thursday, July 28, 2011

Legg Mason Restructures its U.S. Sales Force

Reported by Armie Margaret Lee

Legg Mason's distribution bigwigs unveiled a restructuring of the Baltimore-based asset manager's U.S. sales force. The changes resulted in the departure of 23 people. The firm will also be making some hires as part of the reorganization.

According to an internal memo yesterday from head of U.S. sales Tom Hirschmann, a copy of which was obtained by The MFWire.com, the sales force is now organized around four functional areas: channel sales, cross channel sales, national accounts and sales services.

Hirschmann's boss, global head of distribution Joe Sullivan, told The MFWire.com on Thursday that the number of people Legg Mason will be adding is higher than the number of people whose posts were eliminated.

As part of the reorganization, Legg Mason removed a layer of management and redrew territories (the result was a reduction of about four territories). The changes also impacted some marketing and support staff.

Explaining the goal of the new organizational structure, Sullivan said: "We want to go deeper and get closer to our existing clients and expand the number of clients."

Legg Mason plans to achieve this by having one set of people concentrating on advisors in the major metro areas, and another set of people to focus on advisors in places outside the major metro territories.

In the past, "the wholesalers were conflicted," Sullivan explained. "They spent a lot of time in the major metro areas, but they also had to fly or drive further out. They needed to cover those areas as part of their territory, but it pulled them away from where the greatest opportunity was."

"Now, we're going to focus the traditional wholesalers in the major metro markets, but we're not going to ignore advisors outside those areas," Sullivan said.

The job of covering advisors outside the metro areas will be handled by a new team that Legg Mason is creating called cross channel sales.

Fran Cashman, who was previously with Legg Mason Investment Counsel, will run the team.

Sullivan said the team will have 15 to 25 people by year-end.

The cross channel salespeople will divide their time between field work and communicating with advisors by phone.

The salespeople will operate like hybrid wholesalers, "but in most shops, the hybrid wholesalers are stepping stone positions," Sullivan said. Instead of a stepping stone, Legg Mason wants the cross channel sales post to be seen as a destination.

"It will be viewed from a professional standpoint as a job that is just as important, and just as rewarding, as the external wholesaler position."

Another component of Legg Mason's reorganization plan involves tweaking the duties of internal wholesalers. The firm is removing the administrative burden off the shoulders of internal wholesalers, thus freeing up their time to focus on sales activities. The admin tasks will be handled by the sales services team.

"Historically, internals have done a combination of supporting external wholesalers and handling administrative duties," Sullivan said. "Now are internals are going to do nothing but sales support."

Below are the other three functional areas that make up the U.S. sales team in addition to cross channel sales:

  • The channel sales team, which will be led by Bryan Ward, will concentrate their efforts on the major metro markets.

  • National accounts, now a combination of financial institutions and retail national accounts, will be led by Jeff Masom. The group includes include wealth management, DC I-O, insurance sub-advisory, institutional and retail national accounts.

  • The sales services team, which will be led by Kim Roy, will handle administrative tasks. Sullivan said the team will have around 14 people. 

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