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Wholesaling in the 21st Century
The financial services industry is moving rapidly towards a consultative process at the retail level. This will require investment management and insurance companies and their wholesalers to align with this initiative by providing advisors with relevant feedback, insights, and guidance to build their business and to remain competitive in the markets they serve. Successful wholesalers will need to be able to help advisors acquire and retain more clients, provide advice/solutions that enhance the quality of the advisors’ investment/insurance business, and be seen as a trusted partner and core supplier of business solutions.
Investment management and insurance companies will be challenged to continually evaluate their business practices and wholesaler competencies to remain competitive in the years to come. The business challenge will be to develop ways to better retain accounts and create more predictable growth in what will likely be a very volatile environment.
Based on years of experience working with thousands of advisors and wholesalers, TMC Group offers the following recommendations for investment management and insurance companies to consider as they evaluate their business and look for ways to ensure their success in the first decade of the 21st century:
1. Investment management and insurance companies need to identify and define/refine their value proposition and how they want that to be communicated and delivered to advisors within each segment of their business. Key deliverables and competencies necessary to execute against that value proposition are:
- Practice management consulting capabilities that include:
- Assessment and summary review of an advisor’s practice, including asset-gathering potential, current business model, and investment/insurance philosophy and discipline
- Readiness assessment of the advisor and the advisor’s staff to grow and make changes
- Formal recommendation report and implementation strategy
- Follow-up and support strategy for core vendors
- Premium wholesaling and sales support platform
- Preferred access to wholesaler and the company’s sales/marketing team
- Provide access to industry experts for additional investment/tax/estate consulting services as needed
- Investment management and insurance sales and marketing consulting services
- Provide regular advisor training programs
- Targeted hands-on training from company and industry experts
- Advanced business development and investment/insurance concepts and strategies
2. Investment management and insurance companies will need to evaluate, on an ongoing basis, wholesaler skill and knowledge sets that are critical to carrying out a true consultative process and building “partner relationships” with advisors. Key wholesaler competencies are:
- Practice management consulting skills/knowledge to evaluate advisor’s practice, do practice financial analysis to identify profit and loss factors, provide guidelines for client segmentation, offer marketing and communication assessment, and help them develop business plans.
- Business assessment skills/knowledge (understanding of the assessment process, effective use of assessment tolls, questioning and listening techniques, analysis of advisor and key personnel feedback, diagnostic skills, identifying advisor needs and growth potential, developing appropriate recommendations, etc.)
- Consulting skills (advisor goal-setting, interpersonal communication, feedback skills, motivation techniques, training delivery, and business meeting facilitation, etc.)
- Advanced investment/insurance business concepts derived from the investment management and insurance company’s philosophy (investment concepts and theory, investment vehicles, investment strategies, tax, and estate planning, etc.)
Note: Learning methods for wholesalers may include:
- Internal/external courses and seminars
- Individual and group training programs to reinforce core training
- Assigned readings in books or periodicals
- Intranet or teleconferenced discussion sessions
3. Investment management and insurance companies will need to develop (enhance) the tools and other resources that are necessary to successfully execute against any new business strategy. These may include:
- Marketing and communication materials to be used in promoting consultative wholesaling service with advisors
- Advisor and staff questionnaires for wholesalers to use as the first stage of assessment and evaluation
- On-site interview and evaluation forms/process
- Templates and procedures for data analysis and recommendation report
Investment management and insurance companies that proactively develop these competencies in their business will be better able to differentiate themselves in the markets they choose to serve and ultimately will allow them to build a more sustainable and profitable business. TMC Group has the proven experience and knowledge to help investment management and insurance companies evolve and meet the challenges of the 21st century.
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