MutualFundWire.com: More Fundsters Drive Wholesaler Behavior With Bonuses

MutualFundWire.com

The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication

Thursday, January 3, 2019

More Fundsters Drive Wholesaler Behavior With Bonuses

More and more fundsters are using bonuses for their wholesalers, for both externals and hybrids.

Patrick Newcomb
Fuse Research Network
Director of Benchmark Research

That's one finding from the latest edition of the "Sales Management" report in Fuse Research Network's BenchMark series, which polls sales and distribution chiefs at mutual fund firms of various sizes. In 2018 81 percent of firms were using discretionary bonuses with their hybrid wholesalers, up from 73 percent in 2017, 71 percent in 2016, and 65 percent in 2015. That makes the discretionary bonus more common than any other type of compensation (including commissions on gross sales) for hybrid wholesalers ... except for base salary, which all firms use.

As for external wholesalers, 85 percent of firms now use discretionary bonuses (up from 75 percent in 2017 and level), tied with commissions on gross sales. Discretionary external wholesaler bonuses are even more common with bigger firms, with 89 percent of firms with more than $50 billion in AUM using them and 91 percent of firms with between $20 billion and $50 billion using them. However, discretionary bonuses still account on average for only 13 percent of externals' compensation.

"More firms are looking at that discretionary bonus to drive wholesaler behavior," Pat Newcomb, director of BenchMark research at Fuse, tells MFWire. "We expect that to continue moving forward and grow as a percentage of total compensation dollars, too."

Printed from: MFWire.com/story.asp?s=59141

Copyright 2019, InvestmentWires, Inc.
All Rights Reserved