Funds Face Wholesale Shakeup
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Thursday, January 13, 2005

Funds Face Wholesale Shakeup

Internal wholesaler desks are going to play a different in the future than they do now say the consultants at Kasina. Rather than just handling administrative and support tasks, they will be expected to produce as well.

Costs and shrinking margins are blurring of the line between inside and external wholesaler, claims a Kasina report title "Innovating the Internal Sales Desk." Derek Evans, a principal at Kasina, argues that the current model is "expensive to maintain" and costs fund firms opportunities with the to "expand their share of wallet" vast number of financial advisors that are present in the industry.

Kasina contends that pressure to cut travel and expense budgets even as territories expand and intermediaries become more demanding will force fund firms to make fundamental changes. One of those changes will be to develop the direct-selling abilities of the internal wholesaler. Another will be for fund sales executives to identify the correct market opportunities among the thousands of smaller advisor firms, according to Kasina.

Two segments where Kasina sees growth are "Mom and Pops" and "Advice Seekers.

"The days of simply relying on organic growth to fuel the industry are behind us," said Evans. "Going forward, firms will have to be more aggressive in going after new pools of investment assets if they want to continue to expand."

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