If you’re a wholesaler with a boutique asset manager, you need to make every cold contact count. With most advisors highly resistant to opening emails from or taking a call with wholesalers they don’t know, the onus is on you to make sure you’re delivering a message that has a chance of breaking through their personal “firewall.”
And that message shouldn’t be about product and performance. How well your fund has done against its bogey and its peers doesn’t matter if it’s the kind of fund a particular advisor will never use.
If you want to get any kind of traction at all, it’s critical to get out of “fishing expedition” mode, where you cast a thousand cold contacts hoping one will bite. Instead, make better use of your time by honing in on those advisors who are most likely to be interested in your products. And then deliver a message with an irresistible hook that will land you that all-important first meeting.
How do you do all this? By taking time out from making cold contacts and instead using some of it to vet your best leads.
Start with the obvious
If you’ve been keeping good CRM records, you should have a good sense of the kinds of firms and advisers who comprise your sales sweet spot. Are they wirehouse reps or independent RIAs and broker/dealers? Are they single practitioners or multi-advisor shops? What is their firm-level AUM and how much does each advisor manage? Are their clients primarily mass affluent, high net worth or institutional?
Find the most common characteristics of your best clients and scour your lead list to identify others that match them.
But what if your firm is relatively new, or you’ve just joined it? Or maybe the powers that be want you to focus on selling a niche fund that employs hedging strategies or invests in managed futures, private companies or distressed high-yield debt?
Your fund may have a solid track record and you may have a great story to tell about it, but if you try to pitch it to the wrong kind of advisor you’ll be wasting your time…and theirs.
For example, while almost all financial planning firms are also RIAs, investment management isn’t what makes most of them stand out. They tend to use vanilla asset allocation models stocked with lower-cost equity and bond funds with solid Morningstar and Lipper ratings. Or they may outsource portfolio management to TAMPs. They’re unlikely to be open to pitches for esoteric, higher-fee funds from firms they’ve never heard of.
The same thing applies to investment advisers whose primary clients are retirees or those with $500,000-$3,000,000 in assets. Their objective is to generate good fee-adjusted returns without taking on excessive risk that could potentially derail their clients’ financial security.
So, who’s left after this culling? Ironically, firms and advisors that offer the biggest inflow potential: Wealth management firms, institutional consultants and other investment advisers who target high-net worth investors, pension funds and endowments.
Interest in specialized strategies tends to be higher among advisers who serve wealthier clients, who are often more amenable to adding exposure to non-traditional asset classes in their portfolios.
Validate with the facts
Of course, it always helps if your targeting strategy is supported by actual data. If you truly want to know where your products are more likely to resonate with the advisors and firms on your contact list, consider investing in technologies that deliver this kind of intelligence.
Sales analysis tools like Broadridge’s Opportunity Hunter reveal which funds are being used by the advisory firms you’re targeting. If they’re using similar products to yours, you can view Morningstar data provided by the tool that shows how they compare in terms of performance and risk attributes.
Make that first contact count
Once you’ve whittled down your list to those firms you’ve decided are most likely to open the gate, make sure you don’t do anything to slam it shut. The best way to get your foot in the door is to offer something other than the typical generic product-and- performance push. Can you provide a whitepaper or webinar or even a live Zoom session where a portfolio manager explains how your fund works and the role it can play in investors’ portfolios?
It’s critical to lead with value, especially if your firm is not a household name. After all, if you’ve gone through the effort of honing your lead list to a much smaller and targeted circle of firms and advisors, make sure you do everything you can to make sure your first contact isn’t your last.
Dan Sondhelm is CEO of Sondhelm Partners, a firm that helps asset managers, mutual funds, ETFs, wealth managers and fintech companies grow through marketing, public relations and sales programs. Click to read Dan’s latest Insight articles and to schedule a complimentary consultation.