Are asset managers spreading internal wholesalers too thin?

Advisers reported an increase in their reliance on internal wholesalers in the wake of the recession, according to a study released today by the Financial Research Corp. For many advisers, however, that increasing dependence is accompanied by dissatisfaction with the accessibility and responsiveness of the wholesalers. Several advisers reported being unable to reach an internal wholesaler, indicating that perhaps asset managers are spreading internal wholesalers too thin, according to the study. “Asset managers should be aware of the call volume internal wholesalers receive as well as the number of external wholesalers they support,” said Amy Strong, a contributing researcher to the study and a research analyst at FRC. “Failure to accurately monitor this may result in more missed calls and ultimately missed opportunities. However, when the adviser is able to reach the internal wholesaler and when the [wholesaler] is able to help the adviser with client questions, it leaves a lasting impression on the adviser.” Advisers also said that a key factor they look for in determining the trustworthiness of a wholesaler is product knowledge. Advisers’ reliance on external wholesalers increases as their assets under management increase, positioning the external wholesaler to have greater influence. The significant weight external wholesalers carry with advisers is most directly correlated to the level of face time they spend with advisers. And when wholesalers deal with high-producing advisers or advisers with large books of business, the expectation level of the adviser is fairly high.