Education Plays Crucial Role in Building Relationships with Gatekeepers

Asset managers that focus efforts on educating home-office research teams at broker/dealers are better positioned to capture and retain more assets.

February 2012, Boston. Half of broker/dealers (B/Ds) report that of mutual fund and separate account sales, 50% or more are driven by the recommended lists created by the home office. This is an increase from 2008, when only 32% of firms reported that more than half of mutual fund and separate account sales were the result of their firm's professional buyers. Asset managers are seizing the opportunity presented by this increase and are focusing on these important home-office teams with education and training.

Providing research teams with marketing material and white papers, helps make analysts' jobs easier. And, when the material is targeted to the B/D's needs, sales efforts may well result in platform placement and retention. Thus, asset managers with personnel focused specifically on home-office teams are well positioned to garner and keep a place on B/D recommended lists. Some enterprising asset managers are already moving forward with these efforts.

The Advisory Resources Group (ARG) at MFS Investment Management, for example, was built specifically to address institutional groups, including due diligence teams at managed account sponsor firms. ARG personnel are trained to answer any questions analysts may have and the group works in concert with MFS wholesalers and national account managers so that all points of sale are covered.

"Cerulli believes that conducting in-person meetings with the due diligence analysts at B/Ds is the most productive use of an asset manager's time," said Bing Waldert, director at Cerulli Associates.

Waldert goes on to explain that for larger B/Ds with significant distribution potential, this can entail a portfolio manager visiting the B/D to discuss their investment process and market outlook. Other firms, which offer less asset gathering potential, may be effectively serviced by a research specialist who covers anywhere from 10-30 firms, depending on the asset manager.

"For asset managers attempting to develop stronger relationships with gatekeepers at B/Ds, an increased focus on education is crucial," said Pat Newcomb, senior analyst at Cerulli. "There is no excuse for a manager to be removed from a managed account platform due to their inability to provide product information or because a due diligence team is not properly trained on the manager's process."


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