Corner Office Views | Q4 2021

How Can U.S. Distribution Teams Use Data Effectively?

Insufficient infrastructure and sourcing data remain major challenges.

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Key Points

  • Identifying and deciding how to organize the location of internal data sources is a crucial early step for teams looking to use data.
  • In addition to traditional information like practice AUM and product use, some data packs offer details like team structure and interests sourced from practice or social media.
  • Blending advisor digital engagement data with wholesaler-generated intelligence, sales information, and third-party data sources can help craft the client experience.

Authored by

Ed Louis

Ed Louis

Associate Director

Bio →

Ed Louis

Ed Louis

Associate Director

Ed is an associate director in Cerulli’s Wealth Management practice and leads research for the U.S. Intermediary Distribution report. His research focuses on distribution strategies for retail asset management products sold through financial advisors, advisor product use, and portfolio construction trends. 

Prior to joining Cerulli Associates, Ed worked as an internal wholesaler at Wells Fargo Asset Management. There, he spent nearly a decade working with financial advisors in the wirehouse, independent broker/dealer, and RIA channels.

Full biography here.

Maximizing Distribution Data

Shifting to a virtual format during the pandemic has forced asset managers to confront the fact that the industry’s reluctance to embrace technology has come at a cost. The largest managers have benefited from having the capital on hand to hire more professionals dedicated to data efforts, acquire data inputs, and increase systems functionality.

But even the largest managers still face challenges making the most out of distribution data. The ability to repeatably reduce the time it would normally take for wholesalers to uncover opportunities or guide them toward opportunities that might have otherwise been missed entirely requires more than simply purchasing lists. The biggest challenges include insufficient technology infrastructure and sourcing data.

Insufficient Technology Infrastructure

More than half (55%) of distribution executives find insufficient technology infrastructure very challenging. This includes challenges with the CRM, sales reporting systems, marketing tools, and the general ability to share data between groups. Already complex exercises like measuring ROI become even harder if a lack of systems integration hinders the ability to draw a line from purchased data to lead generation to activity to sales. However, even mundane tasks like getting wholesalers to add data to CRMs suffer when systems are lacking.

One-fifth (20%) of distribution executives find getting wholesaler to input CRM data very challenging.

Identifying and deciding how to organize the location of internal data sources is a crucial early step for teams looking to use data. From there, teams can begin to prioritize investment needs and decide whether to focus on building a centralized system or whether pieces can be adapted over time while dedicated analytics tools draw on the existing infrastructure to begin generating insights in the short term. One-fifth (20%) of distribution executives find getting wholesaler to input CRM data very challenging.

Distribution Executives: Challenges Sourcing Infrastructure & Data Inputs, 2021

Sources: Cerulli Associates, in partnership with the Investments & Wealth Institute, and the Financial Planning Association® (FPA®)


Sourcing Data

More than one-third (35%) of distribution executives find sourcing data very challenging. As teams build out their data capabilities, they must wade through an ever-expanding range of options from which to source information. Firms are still working to understand what data points are available and, more importantly, determine which ones are useful.

Over the past decade, broker/dealers, and now RIA custodians, have turned to selling advisor data to distribution teams as tracking sales data and targeting advisors has become more difficult. Meanwhile, third-party providers like Discovery Data and DST have long worked to provide distribution teams with advisor information. Additionally, managers are attempting to incorporate the wealth of information they can source internally. The majority (60%) of distribution executives find data packs from broker/dealers very valuable.

Distribution Executives: Value of Data Sources, 2021

Sources: Cerulli Associates, in partnership with the Investments & Wealth Institute, and the Financial Planning Association® (FPA®)

Operating in a digital environment has created an opportunity for distribution teams to capture real-time feedback from advisors on products, marketing materials, and value-add programs. Beyond creating openings for wholesaler conversations, this information can help firms understand which offerings resonate with key segments and allocate resources accordingly.

Blending advisor digital engagement data with other inputs like wholesaler-generated intelligence, sales information, and third-party data sources can help distribution teams craft the type of client experience that advisors have come to appreciate in every other area of their lives. However, collecting these inputs can require addressing multiple challenges.

In addition to traditional information like practice AUM and product use, some offer details like team structure and interests sourced from practice or social media.

Acquiring information from data providers and home offices comes with a price tag. Selling data packs has proven to be a lucrative way for B/Ds to offset lost revenue as fee awareness and regulatory concerns have altered the economics of asset manager/distributor relationships. According to their most recent disclosures, Wells Fargo charged managers between $450,000 to $550,000 while LPL charged up to $600,000 for their data analytics packages. Morgan Stanley charged up to $600,000 for mutual fund data alone and gives managers the option of adding on other product information. In addition to traditional information like practice AUM and product use, some offer details like team structure and interests sourced from practice or social media (e.g., LinkedIn).

Sourcing data internally often requires the previously discussed investments in infrastructure. Unfortunately, even once systems have been updated to facilitate entering information, wholesalers can be resistant to changing their behavior and using the CRM. In these instances, distribution executives have shared that tying the behavior to compensation can motivate even the most reluctant adopters. As one head of distribution frames simply, “You get what you measure.”

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