HiddenLevers Eulogizes Death of Asset Management Wholesalers, Heralding New Era of Tech-Enabled PM Consultants

NEW YORK, Dec. 14, 2018 /PRNewswire/ — As financial product complexity grows and regulatory scrutiny enters a holding pattern, powerful Asset Managers are turning their attention to the harsh realities of outdated sales approaches. They are now addressing much needed changes for success in a tech-driven financial product marketplace.

A new White Paper by HiddenLevers, The Death of a Wholesaler (available here), declares the end of the “golf + steaks” era and reimagines the sales and operations of Asset Manager distribution: fintech adoption, automation in data gathering and other inefficiencies, and new value propositions for sales teams.

Key Findings

  • Advisors Want Holistic Solutions  Investment committees are overwhelmed by financial product choice. There is want for Asset Managers to discuss complete portfolio construction over pushing one-off products.
  • Advisors Prefer DIY  Rep as PM Advisors, dominant in the RIA channel, would opt for guided self-discovery over traditional Asset Manager business development initiatives or rehearsed product pitches.
  • User Experience is Sub Par Current Asset Manager digital offerings, if available at all, struggle with data visualization and digital interfaces. Such functionality ends up making product offerings more complex.
  • Ranks are Thinning Asset Managers have stopped hiring or are actively culling sales personnel who cannot add value to financial product offerings that are growing in both sophistication and complexity.
  • PM Consultants are Spread Thin Portfolio Management Consultants, experts behind the scenes that offer insights on advisor models or construct whole new models, cannot keep up with advisor demand due to time constraints and lack of efficiency.

Early Innings

Recently, some big-box firms made moves toward wholesaler extinction – BlackRock’s Aladdin attempted to “control the advisor desktop.” JP Morgan’s Spectrum gave advisors the same technology their “own investment teams use.”  These firms are investing heavily in tech because they know the future is not in traditional wholesaling. The first shots have been fired, and other asset managers must respond.

“The death of traditional wholesaling is inevitable,” said David Ristau, HiddenLevers Business Development Chief and lead writer of the Whitepaper. “The future wholesaler is a tech-enabled financial product expert + salesperson in one. It’s combining tech skills with people skills to enhance advisor performance.”

Even as downward fee pressure and passive flow migration disrupt Asset Manager revenues, the biggest existential threat to the age-old business model is in not coping with the fintech uprising and its ability to create meaningful efficiency + growth.

“We’ve talked to renown low-cost Asset Managers who don’t have basic functionality to showcase how their low fees compare to overpriced managed strategies,” said Jeffrey Baker, contributor to the Whitepaper.

Financial advisors and investment committees are becoming increasingly product agnostic, and they want asset managers to create experience and provide additional value-add services.

“You can be a consultant rather than a sales person. You can be a partner with insights and a needed competency. You’ve got omni-channel capability to communicate with the home office in real-time,” said Ristau. “That’s the future of Asset Manager distribution, and HiddenLevers is helping accelerate that reality.”