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Six Reasons Your Wholesalers’ Prospecting Tactics Aren't Working

Navigating the Evolving Wholesaling Landscape: Common Challenges and Solutions

Asset management firms that raise capital through intermediary channels recognize how challenging it can be for their wholesalers to earn face-time with advisors today. The advisor's role has evolved over the years from fund selection to portfolio construction to holistic financial planning, where model portfolios increasingly replace the hands-on investment tasks wholesalers were adept at assisting with.

The problem many asset managers face today is that they either haven’t adapted their wholesaling approach to match the change in the advisor’s role, or they aren’t sure how to. There are six common reasons that could be hobbling your wholesalers' efforts:

1. Change in Financial Advisor Dynamics

This shift means that advisors are less interested in traditional wholesaler pitches that focus on product features and more interested in how products can provide unique value to their clients' specific situations​​.

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2. Demand for Superior Products and Knowledge

In this advice-centric model, advisors demand products that are factually superior and wholesalers who possess deep knowledge and can demonstrate how their products are better than alternatives. The shift towards an advice-centric model has led to wholesalers needing to be more knowledgeable and capable of holding their own in discussions about product vetting​​.

3. Outsourcing and Centralization of Investment Management

There's a trend toward outsourcing investment management to Turnkey Asset Management Programs (TAMPs) or centralizing it through large RIAs or broker-dealers' in-house teams. This trend reduces the need for wholesalers to visit individual advisor offices, as investment decisions are increasingly made by centralized teams of experts, making it harder for wholesalers to pitch their products​​.

4. Increasing Complexity and Competition

The asset management landscape is becoming increasingly complex and competitive, with high margin pressure, market saturation, and a growing number of indistinguishable investment products. Advisors are now more focused on what value the products add for their clients and themselves, leading to weakened relationships with wholesalers who cannot clearly articulate this value​​.

5. Technological Advancements and Digital Transformation

The industry is witnessing a surge in technology-enabled competitors and a demand for higher transparency and efficiency. This requires a shift in strategy towards providing comprehensive solutions that can help advisors differentiate their services and improve client experiences​​.

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6. Need for Data-Driven and Digital Approaches

To compete in this challenging environment, asset management firms are advised to use data and digital tools to transform their wholesale distribution models. This involves moving beyond the traditional focus on product distribution to support financial advisors as essential channels for reaching end investors. Asset managers must adapt by providing their wholesalers with a consistent flow of educational and value-added content that helps advisors serve their clients more effectively​​.

In summary, wholesalers today are operating in a completely transformed landscape where success depends on their ability to offer differentiated, high-quality solutions that add value and communicate their unique value propositions effectively. They must also enhance their knowledge and adapt to technological advancements to meet financial advisors' and clients' evolving needs.

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