- Research analysts and chief investment officers (CIOs) can have a substantial influence on an RIA's investment decisions
- There is a growing need for wholesalers to be technically proficient to support the sales process
- Advisory practices begin to adopt a more rigorous and formalized screening, due diligence, and ongoing monitoring
The latest research from global analytics firm Cerulli Associates finds that selling to large, sophisticated registered investment advisors (RIAs) requires an institutional-like sales process compared to traditional retail-focused sales, which are often more relationship-oriented.
"With an institutional-oriented sale, a wholesaler needs to take a more consultative selling approach," states Kenton Shirk, associate director at Cerulli. "As advisory practices grow in size, their investment decision-making begins to formalize. They begin to adopt a more rigorous and formalized screening, due diligence, and ongoing monitoring. A larger number of individuals are often involved in the process, including research analysts who hold varying degrees of influence on initial sales and holding periods."
"It is imperative that asset managers consider these influencers in their distribution strategy," Shirk explains. "Research analysts and chief investment officers (CIOs) can have a substantial influence on an RIA's investment decisions. Their roles often function as micro-gatekeepers and they are an important center of influence when considering distribution to the independent RIA and dually registered channels."
"As investment decision-making in practices becomes more formalized and sophisticated, there is a growing need for wholesalers to be technically proficient to support the sales process," Shirk continues. "Through training and attainment of advanced designations, such as the CIMA or CFA, wholesalers are better equipped to face-off with technically-oriented analysts."
Cerulli explains that asset managers need to ensure that they are not only training their wholesalers on the technical aspects of the business, but also offering consultative sales training.