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Thursday, October 18, 2012

Want To Get On a Sponsor Platform? Master the Basics

Reported by Tommy Fernandez

Want to squeeze your mutual funds onto increasingly crowded sponsor platforms? Make sure you pay attention to basics, a panel of fund executives told conference attendees at the Money Management Institute's (MMI) 2012 Fall Solutions Conference held at the Times Square Crowne Plaza Hotel.

Getting onto sponsor platforms has essentially become a losers game, according to the panelists, in which small errors and misunderstandings can cost you.

The panel consisted of the following executives: moderator William Broderick, principal, investment advisory at Edward Jones; Anthony Ciccarone, managing director and head of national accounts business development at Nuveen Investments; Jeff Holland, executive vice president and head of capital markets, Cole Real Estate Investments; and Steve Raimer, partner and director of due diligence at Lord Abbett.

It's perhaps fitting that an Edward Jones exec moderated the panel, given the firm's presence in distribution. The firm boasts 11, 600 financial advisors, $80 billion of assets on its mutual fund advisory platform, $1.8 billion on its separately managed account platform, and $1.2 billion on its unified managed account platform. It distributes about 190 mutual funds, 50 ETFs and 60 SMAs managed by about 85 asset managers across all asset classes.

The first basic rule the panelists laid down: Get to know the people you need to reach -- their names, their offices and contact info. Because the gatekeepers have piles of fund pitches to go through, an initial mistake or bad impression could cost you all future access.

"Pick your spots, decide which ones you want to go after," said Cole Real Estate's Holland, who explained that, depending on the company, the gatekeepers could all be in one due diligence office or in several.

Ciccarone from Nuveen urged audience members to push for basic instructions. He noted that one platform provider actually had a PowerPoint presentation available for asset managers invested in doing business with the platform.

"It's a great intro," he said. The second basic rule: Come up with a clear plan before you make even one phone call. You get one chance to make a first impression on the gatekeepers, and once that's blown, you're likely toast.

"Don't just start calling people. Don't do that. Develop a strategy, understand who you are going to and deploy your resources smartly," said Holland. "Make sure you add value to the people you are approaching. People who waste [other executive's] time will not be called back."

Another important basic tip: Make sure your PMs are with the program and can articulately sell their funds to gatekeepers. And learn to be more forward-looking about your funds. Don't focus so much on performance history. Instead, refine your pitch to the goals and objectives of the model developers, analysts or other executives at these platforms.

"We are all still much too backward-looking with our performance," Ciccarone said.

Other tips included, Commit to your hiring and infrastructure-building before you reach out to gatekeepers, not after. Don't tell a gatekeeper you will hire necessary people after assets flow in.

A final tip for smaller firms looking to introduce their burgeoning funds to platforms: Find allies within each target distributor to shepherd your fund through the application process and chat up its value to all the relevant people.

"You need a champion," said Holland. 

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