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The Next Gen Wholesaler

Diana Britton | May 08, 2017

In the 1990s, a wholesaler could walk into an advisor’s office with a pack of golf balls, a factsheet and a high Morningstar rating, and easily sell a mutual fund.

“It would be the doughnuts and coffee in the morning, it would be the pizza delivered at the end of the day, there would be sandwiches at lunch,” says Bill Connolly, co-head of global distribution at Putnam Investments. “Those were the three prime opportunities for someone to get up and pitch a product.”

But times change. Advisors are less focused on transactional business; they often have their own independent research groups at the home office. They don’t need product information, they simply look up any data they need on their desktop.

Add to this the rise of passive investment funds, a proliferation of niche investment products for retail advisors, and more demands on advisors’ attention from non-investment focused pieces of the business, it’s no wonder advisors said in a recent survey that they only want to meet with their top two or three wholesalers. And only then about twice a year.

These dynamics are converging to bring significant change to the wholesaling business. DST kasina, a research and consulting firm, expects wholesaling ranks to shrink by five to 10 percent this year, driven by a combination of attrition and consolidation among asset managers.

Neil Bathon, founder and partner of FUSE Research Network, has an even darker view on the future of distribution: in three years, wholesaling teams will be cut in half and the numbers will continue to fade from there, he says.

“There are very few things I’m more certain of than the fact that there are limited opportunities for wholesalers to influence buying decisions, and it gets more and more limited every month,” Bathon says. “I had a woman come up to me after one of my presentations and she said, ‘I’ve consistently been the top wholesaler at our firm and I think I have about a three-year window to try to figure out how to reinvent myself in order to be relevant.’”

Asset managers are already starting to cut the cost of expensive “road warriors” in favor of smaller numbers of home-office distribution teams focused on big data and analytics to target the advisors with whom they have the best chance of success.

To stay relevant, wholesalers will need a broader skillset to help advisors with facets of their business beyond product selection — including portfolio construction, asset allocation, and even financial planning and practice management.

Data and Analytics

The largest asset managers have invested heavily in building out their business intelligence functions to help them make more informed data-driven decisions, says Lee Kowarski, vice president, DST kasina.

“They are really arranging wholesaler coverage, territory design and the advisors that they call on based on an analytics-driven assessment of the opportunity,” Kowarski says.

Managers will allocate sales resources based on advisors’ preferences and the profitability of those relationships. For example, advisors who outsource portfolio management decisions to their home office require a different type of support than those who maintain discretion, he says.

Firms pool this data from different sources, including their own internal CRM systems, marketing automation tools and web analytics. Third party research firms, such as DST kasina and Discovery Data, also serve up plenty of data. Some broker/dealers will even provide asset managers with data packs — either at a cost or for free — to give greater context around the advisors that work at the firm.

“To have a large (wholesale) field force spread around the United States, or in some cases around the world, it's a pretty expensive proposition,” says Jim Jessee, president of MFS Fund Distributors and co-head of global distribution at MFS Investment Management. “To make sure that their time allocation is based on more information and data, as opposed to just gut instinct, makes an awful lot of sense. I think the good thing is, over the last decade, the data that's available to help us with those decisions is better.”

For instance, MFS looks at daily sales data and the type of funds being bought to gauge the likelihood that a certain advisor would be ready to place more business.

But the problem is that everyone has access to largely the same data, so wholesalers from different firms end up approaching the same advisor, Bathon says.

“Thirty firms come across that same advisor, and they send all of their wholesalers to go meet with them because they meet the profile,” he says. “A person only really wants a relationship with four or five firms, so the other 26 are just noise and a waste of time.”

According to Discovery Data, there are 106,000 branches with just one rep in them. There are 21,000 independently owned retail RIA firms. In 10 years, that’ll grow to 40,000 firms with some 150,000 advisors.

“How do you cover that? You can’t do it with boots on the ground,” says Bob Herrmann, president and CEO, Discovery Data. A response to an email-marketing message can yield more discussions with a far lower acquisition cost than having sales reps blanket the country and knock on doors.

Internals can have 15 to 25 good conversations with advisors a day, says Jessee. That would be impossible for external wholesalers. That’s why MFS has about twice as many internal folks than they did a decade ago.

The Skillset

Wholesalers who still interact with advisors have to offer more than just a product pitch, says Craig Pfeiffer, president and CEO of the Money Management Institute.

To help explore that idea, the group hosted its inaugural Distribution Leadership Forum in February, where top wholesalers could share what has worked for them.

“We’ve got to come in and not only help [wholesalers] think about the investment management side, but also the conversation with the client side. How do we engage a client, how do you tell that story, how do we manage this across our book,” says John Moninger, national sales director at Eaton Vance and co-chair of the Distribution Leadership Forum.

The truth is there is a growing mismatch between advisors’ priorities to focus on client engagement, and in many cases financial planning and the wholesalers, who still want to talk about investment products and markets, he says. The best wholesalers in the business are “end-client-savvy." They understand the issues clients are facing, such as the impact of taxes or generational shifts driving Environmental, Social and Governance investing.

Wholesalers are also trying to prove their value by bringing a deeper understanding to an advisors’ overall portfolio construction, including asset allocation and portfolio management, and how the pieces work together, Bathon says.

Technology has enabled Eaton Vance’s wholesalers to customize equity and bond portfolios through its suite of separately managed accounts. A firm can customize the portfolio to emphasize tax loss harvesting, or tilts towards client-specific priorities like, perhaps, socially responsible investing.

Putnam’s Portfolio Navigator modeling tool can identify and track dozens of investment risk factors in a portfolio. The advisor will receive a customized report showing the breakdown of current risks, the impact on returns over time, historical scenario analysis and stress testing.

“The wholesaler who's going into the branch needs to know a broad range of his or her products,” Jessee says. “They're not going to have a portfolio manager with them that often, so they've got to be able to carry that conversation and they have to be able to pivot.”

Emphasizing the level of skill and knowledge wholesalers need today, about 40 to 50 percent of MFS’ wholesalers hold either the CFP or CIMA designations — each of which come with fairly rigorous continuing education requirements that are pretty rigorous.

“[Advisors] will find the time for the people that they find are truly exceptional and build barriers to entry for average or worse, in terms of the skillset,” he said. “So, I think it is a challenge to the wholesaling community that you better be viewed as exceptional because those people will be granted the audience; the others will probably be blocked by their administrative assistants, or they'll end up leaving lots of voicemail messages.”

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Q&A: Internal Wholesaler at a Mutual Fund

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I work at a large MF in the Northeast as an internal wholesaler. For those of you who don't know what that is, it's basically inside sales. I make outbound dials to financial advisors to sell them our mutual funds among other things. I have over 4 years of work experience and am going for Level II of the CFA Program. Because I tend to read Q&As the most on here, I'm paying it forward with one of my own. Ask away.

What is pay like and how is it structured? What's the difference between external and internal wholesale.

BEAST MODE TRADER: What is pay like and how is it structured? What's the difference between external and internal wholesale.

The average pay is between $70-90k in total comp for an internal who works at a MF . It's usually higher for those working at REIT shops that are the "flavor of the day" - can be anywhere from $80-120k.

Base is around $40-50k with the rest of the comp being commission paid monthly.

An internal works at the home office supporting an external who works out in the field - aka the external lives in the territory they cover. The disparity in pay is enormous. Our top external wholesalers cleared north of $1 million in 2014. Average external wholesaler pay is around $400-600k.

What do you like and dislike about your job? What kind of kid would you recommend pursue this job?

DickFuld: What do you like and dislike about your job? What kind of kid would you recommend pursue this job?

I enjoy the hours of the job, to be honest. It's a straight 9-5 with one hour of lunch, and absolutely no pressure to do overtime unless you need to get things done for your territory. There is a lot of leeway in how you organize your day as long as you hit your metrics. The pressure in hitting your sales goal really falls on your external wholesaler's shoulder - he's the one who will get canned if the territory does not bring in revenue.

I think outgoing people and those who played sports competitively in high school or college will succeed. It translates well into sales. Now we don't look for straight-up jocks who can't pass their Series 7 , but those with intelligence and self-motivation. This isn't a bad way to make a living for someone who's fresh out of college.

As an internal at a MF company based in the midwest, I will tell you this - while you can do an average job working 9 to 5, it's really important to cater your hours to coincide with the territory you support. My company has outreach to the entire country - across all time zones. Too often, I see internals come in to work their 9 to 5 based on their own clock. If their territory is on the east coast, they really should be in by 7 - to make sure that they can get the started with their east coast customers. On the other side, the west coast internals should plan on staying until at least 7.

If you don't mind getting more granular, how exactly does the commission payout work? Is it a lot harder to become an external wholesaler? Interested because I graduated in the northeast and one of the few things that were recruited for on our campus (no finance career fair senior year) was internal wholesale at Putnam. I didn't really want anything to do with mutual funds and work on a trading floor now but jw more about what I decided not to pursue.

BEAST MODE TRADER: If you don't mind getting more granular, how exactly does the commission payout work? Is it a lot harder to become an external wholesaler? Interested because I graduated in the northeast and one of the few things that were recruited for on our campus (no finance career fair senior year) was internal wholesale at Putnam. I didn't really want anything to do with mutual funds and work on a trading floor now but jw more about what I decided not to pursue.

Commission at most MF is based on gross sales, which means you get paid basis points on all sales that come in. Rarely do you find a company paying on net sales, in which case redemptions would get backed out of the gross figure. A company doing this would find it hard to keep talent in times of major redemptions (see PIMCO ). The calculation of your basis points all depends on your yearly sales goal, and each company does it differently.

It's becoming harder to get an external gig. There's more competition and you find a lot of people in the industry going for their CFA , CAIA , or CIMA designations to differentiate themselves.

IMO, sales gets overlooked by a lot of folks interested in finance. Who would have thought that you could make more than your average HF analyst by wining and dining financial advisors?

How many externals/territories are there? Is there quite a bit of travel involved for them in order to get in front of advisors?

baseball22: How many externals/territories are there? Is there quite a bit of travel involved for them in order to get in front of advisors?

For big MF companies, it's normal to see over 50 externals. Travel is extensive - you're on the road everyday having 4-5 meetings per day. This is not door-to-door selling a la yesteryear - there is already a well-developed pipeline of producers and prospects that you meet.

First, thanks for doing this. Second, is it possible to go straight to an external wholesaler role or is it typically internal and the transition to external? Is sales experience necessary or just desired? I'm an FI analyst but given where I live I would have to go the external wholesaler route. Thx in advance.

joey joe joe shabadoo: First, thanks for doing this. Second, is it possible to go straight to an external wholesaler role or is it typically internal and the transition to external? Is sales experience necessary or just desired? I'm an FI analyst but given where I live I would have to go the external wholesaler route. Thx in advance.

You almost always go from internal to external. Unless you are very well-connected, it's rare to see someone go straight to an external gig. Sales experience isn't necessary, however they will ask you in the interview why you want to do sales, and you must have a good answer.

It helps tremendously if you are already licensed with the Series 7 and 63 when you apply.

externals get paid more than I expected, though I'm assuming that's more commission based.

what's the douchiest thing a broker's ever done/said? either to you, your external, or some other story.

also, describe any differences with working with wirehouses versus indy shops/RIAs, I'm curious about that.

thebrofessor: externals get paid more than I expected, though I'm assuming that's more commission based. what's the douchiest thing a broker's ever done/said? either to you, your external, or some other story. also, describe any differences with working with wirehouses versus indy shops/RIAs, I'm curious about that.

Probably not the douchiest thing, but it's funny whenever I man a booth at an investment conference and advisors who have no intention of doing business with us, come to our booth to make chit chat with the sole intention of grabbing one of our trinkets. Then they scurry away as if they never spoke to you.

I did hear one story of an advisor who did less than $1mm of sales (which is nothing) demand tickets to the Super Bowl because he was a whale and could do millions more. Yeah right. Needless to say, he didn't get his tickets.

Big difference between indy and wirehouses. Independents tend to be smaller producers and thus, have more time to talk over the phone. It's not uncommon for me to have 20-minute conversations. Wirehouse guys are much tougher to get over the phone, and when they do answer, it's a "What are you selling and what's so good about it in 30 seconds or less?". Consequentially, burnout is faster for wholesalers who cover wirehouse firms.

yeah there are maybe 3 managers we could ask for something like that from, but even then, super bowl tix aren't exactly easy to come by.

if you don't mind sharing, what's your territory? I wonder if we've spoken before...

As a side note, the financial advisory model is rapidly evolving. A lot of the independent advisors are starting to look more like RIAs - offices with a few partners, an investment committee, 1-2 analysts, and an operations team. For those guys who cannot get a job as a Research Analyst, it may be worth it to apply to these types of offices as the competition is much less.

What is the external wholesaler's job like on a day-to-day basis? It always seemed to be extremely cushy from an outsiders perspective who didn't really know much about it. Was the job changed much in the fallout from the financial crisis ? I was always confused for example by why an insurance company would have one wholesaler for fixed annuities and one wholesaler for variable annuities

Pio nono: What is the external wholesaler's job like on a day-to-day basis? It always seemed to be extremely cushy from an outsiders perspective who didn't really know much about it. Was the job changed much in the fallout from the financial crisis? I was always confused for example by why an insurance company would have one wholesaler for fixed annuities and one wholesaler for variable annuities

Annuities have, by and large, become an almost extinct business for all but the select few (Jackson National). Credit that to low interest rates.

A typical external wholesaler's day looks like this:

7:00 am: Wake up, eat breakfast, check agenda for the day, put on a suit and tie (not Jos A Banks, for the money you're making you can afford a custom suit from Brooks Brothers) 8:00 am: Drive to your first meeting of the day, fighting through rush hour traffic 9:00 am: Get to the meeting at a local breakfast place, sit down with one of your best advisors, has $10 million with your firm, consistently drops tickets, shoot the breeze and talk about which new funds he should be looking, review performance of any existing positions 10:00 am: Leave meeting, have thirty minutes before next appointment, fiddle around with Gmail calendar 10:30 am: Meet with a prospect, finds out he does biz with XYZ fund company, has $80mm AUM , is looking for a good multisector bond fund, sell him ours, he hints that he can start doing business if you support his next client event, he's asking for $1000, you mull it over and agree to follow up next week 11:30 am: End meeting, drive over to a steak house for lunch meeting at noon 12:00 pm: Sit down for lunch with a group of advisors who come from the same office, they do some biz with your firm but can do considerably more, this is the meeting where you develop rapport and if they really like you or your funds, can start driving significant sales 1:30 pm: End lunch, rush out of the steakhouse to make a client appreciation event one of your advisors is hosting at a country club 2:00 pm: Get to the venue, schmooze with the advisor and hand out trinkets (firm-branded water bottles, pens, etc.), have a thirty minute talking spot, you go over market outlook and mingle with everyone over hors d'ouevres afterward 3:30 pm: Leave the country club and make the drive back home to your wife and two young kids 4:30 pm: Get home, enter in meeting details onto your laptop, game plan for tomorrow's agenda, look over emails, and have a chat with your internal about the day

7pm-?am: steak dinner followed by bars & strip joints with brokers

or was I supposed to not mention that

Are certain MFs known to be great spots for either internal or external wholesalers? Or is it fairly homogeneous across the board?

BankSouth32: Are certain MFs known to be great spots for either internal or external wholesalers? Or is it fairly homogeneous across the board?

Not all MF companies are created equal. It all boils down to if your firm has a wide product offering and if performance is good. You can have the best relationship with a financial advisor, but if your fund has 2-3 straight years of underperformance, he will start looking elsewhere even if he doesn't want to. He has a duty to his clients as well.

Right now, BlackRock and Goldman Sachs are top places to be a wholesaler. They're crushing it. On the other end, firms like Virtus, Pioneer, Fidelity , etc. are bleeding assets, I believe. Fund flow data is important to look at before deciding where to work. You don't want to jump on a sinking ship.

Thanks for doing this, nice to see a profession we don't normally see on here.

What's your plan going forward? Do you want to try to make the move to external? What's the career progression like for an internal?

Cruncharoo: Thanks for doing this, nice to see a profession we don't normally see on here. What's your plan going forward? Do you want to try to make the move to external? What's the career progression like for an internal?

Depending on the firm, internals have a number of places they can go. The most popular, and obvious, choice is to get promoted to the outside. Other areas are product management, institutional sales, and national accounts.

My goal is to continue on the CFA track and eventually break into an entry-level research position on a portfolio management team. This is rare, but I know what I want to do and will keep networking within the company. Being an internal provides good exposure to portfolio managers (since they present at sales meetings), so we'll see where my efforts take me.

can a full-time MBA student recruit into External? What is the strategy or approach?

Jake-S: can a full-time MBA student recruit into External? What is the strategy or approach?

Unless you have previous experience in outside sales, I wouldn't count on it. In this line of work, there is more value in getting experience as an internal wholesaler than a full-time MBA .

An MBA likely won't teach you sales skills, public speaking, organizing and attacking a sales territory, blocking out 2-3 months worth of meetings, etc.

However, that being said, an MBA definitely will not hurt you. When an internal is considered for a promotion, an MBA will always be looked upon favorably.

I know some guys who left being Financial Advisors for a wholesaler because it was so much easier and the pay was way better. This has definitely been an option in the back of my mind as it very common for guys to leave where I currently work for this.

Banquero: I know some guys who left being Financial Advisors for a wholesaler because it was so much easier and the pay was way better. This has definitely been an option in the back of my mind as it very common for guys to leave where I currently work for this.

Correct. It's very common for younger people who just couldn't cut it in a financial advisor training program ( Morgan Stanley , Edward Jones, Merrill Lynch, etc.) to jump over to being an internal wholesaler.

You go from working 8am-8pm to country club hours and better pay. It's a no-brainer. Unless your father runs a $200mm practice, 99% of folks who go into a financial advisor program don't make it.

Definitely sounds more appealing, if you could rank the top 5 or top 10 wholesalers to work for who would you list?

Do you think the role/importance of the wholesaler will change over the next few years? How's the job security?

My two cents here: with many Advisors moving to fee based models (from commission) as well as the growth of discretionary programs (e.g. Rep as PM) the role of the wholeseller is going to be less about schmooze are more of a technical sales role in the future.

jdubh5401: Do you think the role/importance of the wholesaler will change over the next few years? How's the job security?

The roles of both external and internal wholesalers are constantly evolving. We were much more important pre-dot com boom, when financial advisors had no way of getting fund information without meeting with a wholesaler. Now, mutual funds have been commoditized and information is freely available online - there isn't really anything that separates one fund from another besides performance.

There is more emphasis on wholesalers to cultivate relationships and provide value-added to their clients. Along with selling, we'll help advisors with business-building ideas, client events, and portfolio analysis.

As with any job in the financial industry, it's only as secure as the economy we're in. If markets crash, then expect headcount reduction as firms try to consolidate territories and reduce expenses. Right now, it couldn't be a better time to be wholesaling - investors are confident after having 5 years of a bull market.

My apologies if something similar has been asked to you previously but I was curious to the difficulty of transitioning into this position. Becoming an internal wholesaler interests me a lot and I have done well in my two years of experiences in a financial sales/customer relations position.

In your original post you said that you have four years of work experience. Have you been in the internal wholesaler role that entire time? What is the career progression like for the role and transitioning?

BankSouth32: In your original post you said that you have four years of work experience. Have you been in the internal wholesaler role that entire time? What is the career progression like for the role and transitioning?

I originally didn't start out as an internal wholesaler. I got licensed elsewhere with my Series 7 and 63 in a more client-service role. I've been an internal for just shy of four years, and at this point, I'm ready to make a move.

The career progression is fairly simple. You internal wholesale for 2-4 years. It takes at least one full year to learn all the ins and outs of your territory, develop relationships with advisors, and most importantly work well with your external wholesaler.

In your second and third years, running the territory becomes much easier and you become a leader on the sales team. If you consistently hit your metrics and stand out to senior management, you'll be considered for an external spot when they become available.

If you do all of the right things, you can be making $200k all-in in your first external gig by the time you are in your mid to late 20s.

I am a research analyst at an RIA in the northeast, and am a primary point of contact for internal and external wholesalers. My firm uses a relatively small number of mutual funds and it takes a while before we decide to commit assets to a fund.

Thus we won't end up using funds from the majority of the wholesalers who I talk to. I try to walk a fine line and let them give their pitch and not be a dick, but then again I don't want to lead them on if we have no intention of using their funds in the near-term. What are your thoughts on this and what is the best way to respond if it is not going to be a fit?

whitecollarandsuspenders: I am a research analyst at an RIA in the northeast, and am a primary point of contact for internal and external wholesalers. My firm uses a relatively small number of mutual funds and it takes a while before we decide to commit assets to a fund. Thus we won't end up using funds from the majority of the wholesalers who I talk to. I try to walk a fine line and let them give their pitch and not be a dick, but then again I don't want to lead them on if we have no intention of using their funds in the near-term. What are your thoughts on this and what is the best way to respond if it is not going to be a fit?

The way your RIA does business is quite common. All that wholesalers expect is an opportunity to come in and give their pitch. If the advisor feels that it's not the right time, or not the right fund, then the least they can do is politely tell their wholesaler as much. That way there is minimal time wasted for the wholesaler, and he can move on while at least keeping you in mind later down the road.

The worst thing an advisor can do is lead a wholesaler on by first asking for support, then not committing the business the wholesaler expects. So in a sense, there is some honor involved in this industry.

As an internal for a boutiquey MF shop in the Midwest, I will tell you that I would rather hear you tell me the truth, as opposed to leading me on. That said, it's never bad practice to run through your story with a potential client - to work on your delivery. So, go ahead, ask any question you want when an internal calls you to pitch something. We don't mind the conversation and enjoy the fact that someone is actually asking us questions, versus telling their assistant to let the guy know that "they're out of the office or tied up in a meeting right now ---- send him an email". Bottom line - even if you don't buy from us, you're helping us improve our craft, and giving us something to record from an activity standpoint - to drive our metrics. Our boss, and our external partner really just want to know if we're advancing the conversation with potential clients. In the end, while it's our job to sell/consult, it's just as big a part to find out who is NOT going to do business with us - to save the externals the hassle of wasting their time with a piker. That said, doing the same with an external is BS . If they're wasting their time with people who have no intention of buying, the opportunity cost is much higher.

Once you make it as an external wholesaler, most people end up staying there. The pay and lifestyle are great. However, some folks have managerial ambitions and can move onto becoming a National Sales Manager, which means managing a group of externals. You'll be making $500k or above easily.

Can you transition directly into a DCIO role if you have been working as a senior analyst for an institutional manager or do you still start in the internal side working with RIA's? Given our size, $40bn, I usually have 2 - 3 meetings a week with DC guys and then a few with PM's every month. So, I have a strong understanding of how I want to be sold something and the selling is more technical, at least on my end.

ThorsteinVeblen: Can you transition directly into a DCIO role if you have been working as a senior analyst for an institutional manager or do you still start in the internal side working with RIA's? Given our size, $40bn, I usually have 2 - 3 meetings a week with DC guys and then a few with PM's every month. So, I have a strong understanding of how I want to be sold something and the selling is more technical, at least on my end. Thanks.

Good question. DCIO roles are not different, they still have internal and external positions, however they qualify as institutional sales, not retail sales (higher level of prestige and better pay). For someone like you, I'd imagine starting out as an internal DCIO specialist and working your way up to an external gig.

With your background, I can't imagine you not getting interviews for an internal DCIO role.

How many regions are there/how are they broken up? I'm assuming that the New York market has more wholesalers than the North Dakota market

jdubh5401: How many regions are there/how are they broken up? I'm assuming that the New York market has more wholesalers than the North Dakota market

I cannot imagine North Dakota having more than one wholesaler - for any firm. Big funds like BlackRock will have at least 50 wholesalers. Small funds and asset managers can have as few as 10. The breakup is very, very specific to the company, so it can differ widely from one fund to the next.

Densely populated regions such as the Bay Area (San Fran, Silicon Valley) can have 2-3 wholesalers without any overlap.

I work for a top 20 active MF shop. We have over 100 External Wholesalers. We've got a Manhattan guy for each wirehouse. The 'Dakotas guy' also covers 2/3 of Montana. It's all about where the assets are.

I'm in PWM , at my office we get the lunch meeting pitches from wholesalers a few times a week usually, mostly about annuities.

You said you got your 7/63 somewhere else, so I take it that means you transitioned from retail/ PWM into wholesale? I totally get the hours and all as far as reasons why, if that's it then that's it, any other color you could add would be great.

Also, how does the comp work, is it rigid production based targets or do you get bps on the fund fees in your territory?

How hard is it to change over from PWM? I imagine that's probably the most common path to wholesale?

kj5159: @krazyk I'm in PWM , at my office we get the lunch meeting pitches from wholesalers a few times a week usually, mostly about annuities. You said you got your 7/63 somewhere else, so I take it that means you transitioned from retail/ PWM into wholesale? I totally get the hours and all as far as reasons why, if that's it then that's it, any other color you could add would be great. Also, how does the comp work, is it rigid production based targets or do you get bps on the fund fees in your territory? How hard is it to change over from PWM? I imagine that's probably the most common path to wholesale?

As an internal, you're not just dialing away selling funds all day. There is a big misconception about that. I would say 60% of your time is over the phone, and the other 40% is divvied up running investment reports (Morningstar, Zephyr), reading up on capital markets, sorting through territory data on Excel , speaking with your external wholesaler, meetings with product managers, etc.

So in that sense, we have more responsibilities than people outside the industry imagine, and it makes the job quite fulfilling. The only thing that would make it better is for pay to be more in line with externals.

Comp is split between salary, commission, and bonus. Commission is determined by how many basis points you get paid on every $ that comes into your fund. Each fund company calculates this number differently, and it can become very convoluted. Let's just say that if your territory goal is $100 million for the calendar year, and you bring in $80 million, you will make 20% less than your targeted annual commission.

People actually still use Zephyr? I use to be with the company that made Zephyr and that product was dying hard.

Thanks for doing this, +1. Would you mind breaking down an internal's average day? For MF companies that offer ETFs , do those get wholesaled as well i.e. BlackRock iShares funds? If so, I imagine Vanguard has to be up there as top companies along with the one's you listed?

Appreciate the feedback man, +1. I'm looking to move into a more sales-oriented role so this is definitely helping me narrow down my options. One more thing, do you see a lot of wholesalers with the CFA designation? I wasn't sure how common/necessary that is for this role.

jdubh5401: Appreciate the feedback man, +1. I'm looking to move into a more sales-oriented role so this is definitely helping me narrow down my options. One more thing, do you see a lot of wholesalers with the CFA designation? I wasn't sure how common/necessary that is for this role.

It's rare to see a wholesaler with the CFA charter. It's not necessary to become a wholesaler, but the industry is changing such that having one gives you a huge boost in credibility. CFA is highly regarded in Institutional Sales.

Who sets up all the meetings? Is it you/your team dialing for dollars calling up offices or how does that work?

Depending on your external wholesaler, he/she (yes, there are women in this field and they are very good at what they do) will either rely on you to get them a good chunk of their meetings, or have you work in conjunction with a scheduling assistant that they pay out of their own pocket for. For example, the wholesaler will try to get meetings with his/her established relationships ("A" producers) and let you work on the "B" and "C" producers. It is not easy to get 1000 meetings a year - that is a huge amount of volume and will likely decrease as the industry continues to evolve.

I'm a college senior graduating in 3 months with a finance degree and a pretty strong resume and hope to begin work in October (ideally). Becoming an internal wholesaler looks like an extremely attractive option as I'm looking for a sales position within finance.

With a few months to myself after May, what can someone like me do to better prepare for the job as an internal wholesaler at a mutual fund?

Outside of school, some of the activities I'm involved with include: working at my school's call center cold-calling alumni 10 hours a week for donations, & belong/actively participate in toastmasters international on a weekly basis

(what skills can I try to hone in, and how can I...that will set me up for success as an internal wholesaler?)

MileHighMoney: I'm a college senior graduating in 3 months with a finance degree and a pretty strong resume and hope to begin work in October (ideally). Becoming an internal wholesaler looks like an extremely attractive option as I'm looking for a sales position within finance. With a few months to myself after May, what can someone like me do to better prepare for the job as an internal wholesaler at a mutual fund? Outside of school, some of the activities I'm involved with include: working at my school's call center cold-calling alumni 10 hours a week for donations, & belong/actively participate in toastmasters international on a weekly basis (what skills can I try to hone in, and how can I...that will set me up for success as an internal wholesaler?)

Learn how to present. Watch YouTube videos of Steve Jobs, Bill Clinton, etc to see what they do so well. Every MF firm will want excellent presenters.

Secondly, go to the website of the MF you'll be working for and study the fact sheets of their top funds. Know its competitors and what makes your firms' product different.

Knowing how to present (at the end of the day, selling yourself/your product) and knowing your funds inside-out is going to put you at a huge advantage.

I'm a external myself, not for funds but K plans which obviously contain the funds. Wholesaling is a great gig if you're a people person. It sounds cushy but you will work your butt off. I work very closely with the retail and DCIO guys, pay is very good for all of us across the board. Dont plan on going right to an external role, you have to cut your teeth as an internal. On average I work 50-60 hours a week, but I enjoy my job so it's not bad. I'm home almost every night (dense territory unlike the guys who cover multiple states) and make great money, but it can be stressful if you have a series of slow months and you are not hitting your numbers. Also, I have an education degree, wholesaling doesn't put a big emphasis on what school or degree you have, they want personable people who can present well, will works their butts off and are competitive.

I think the fact that you have an education degree is very interesting. I have a finance degree myself but I'm guessing that the most important aspect of the internal/external role is being able to sell and being able to handle the financial information.

As I look for the optimal internal wholesaling job I keep seeing under the job requirements section of a job posting that they constantly require "1-3 years of financial sales experience". If you're an external and were previously an internal I assume, how did you get the job? Did you have previous financial sales experience? Or a series 6 , 63 & 7?

Hey guys sorry for being MIA but I started with a new company just a few days prior to my lasts posts so I've been concentrating on my territory and job.

To answer a few questions... 1) you don't necessarily need financial experience. I had a year and a half customer support for a fund company and then a recruiter found me for an inside gig. I've seen other guys come from all different backgrounds. 2) it's sales, every company has different metrics...you eat what you kill 3) you are not going to find a higher base. It's a starting position, you have to work your way up just like everywhere else in this industry. Starting comps are all similar regardless of what you are selling. 4) I wouldn't really say there are easier things to sell over other, they all have their challenges. in my role we are not looking for guys to drop tickets. I'm punching holes in competitors and keeping up with DOL regulations in order to win business.

If you are not a Type A personality , aggressive, goal oriented and can't handle rejection this is NOT the job for you.

What's the best route for someone to become an internal wholesaler? I hold an MBA with sales experience, but not related to finance. Essentially I am trying to break into the industry, but I'm finding it difficult without a Series 7 . What positions should I aim for that will sponsor me to attain my Series 7? I am not opposed to entry level positions.

Most places will sponsor you for your 7 when becoming an IW. Check job boards or just hit all the career sections of many of the fund company websites.

I'm making the transition into sales, I'm expecting a few offers at different firms for internal wholesaler positions. What would you look for to pick the best (or the easiest to sell)? They all have similar base with target comps . Also, you mentioned 70-90k, is that comp possible in first year? I'm looking to replace about 80k salary.

Go with a firm that has a strong reputation in the industry and a broad fund lineup. I cannot stress enough that you do not want to be associated with a firm that has had bad press in recent years (think Virtus/F-Squared) or a shop with just 1-2 products - when they have a performance slump you'll go from selling to defending.

So to clarify total comp, it'll be $40-50k base salary, $20-35k commission, and $0-20,000 bonus (which is driven by company-specific metrics and usually paid quarterly). Can be as low as $60,000 up to $100,000+ if you are in a great territory and hit your bonus targets.

@krazyk Do you have daily/weekly/monthly call metrics that you need to hit? Is your bonus based on tangibles such as total activity (calls/emails/meetings)?

I realize that I'm responding to questions from over a year ago - I had a baby around that time and was basically MIA - my apologies.

To answer your question, fund shops have metrics that you need to hit to keep your job. They tend to be in the range of 50-60 outbound calls per day and 10-12 conversations per day (of those 50-60 attempts, not on top of). So if you average around those minimums for the month, you should be good, but to get the quarterly bonus, you'll have to exceed those mins by a fairly large margin .

As you can guess, that encourages a lot of "gaming" within the internal sales desk.

First off, This has been an amazing thread to read and very helpful. Thank you!!

I currently work in performance measurement / analytics for a large Firm and am progressing through the CFA . I'm increasingly considering transitioning from a BO /MO analytics role to a sales role, however I'm now ~5 yrs into my career. Would transitioning to internal be easy from performance measurement? is there another sales role with higher starting base that I could pursue given my background ?

Your insight is greatly appreciated.

Ah, I would tell you to re-evaluate your reasons for wanting to go into sales and whether you would be a fit for such a role. If you still want to go into sales after some thought, there is no better way to break in than by being an internal wholesaler at an asset manager.

To get a sales role with a higher starting base would be tough. The comp in this line of work is very back-end heavy, i.e. a bulk of it comes from commission/bonus and the salary is there just to keep you afloat.

If you're in performance measurement and on the CFA track, the logical transition in my mind would be to try to get into a Portfolio Specialist/Client PM role, albeit at a junior level.

Bump, any more insight on interviewing for this position?

Be able to answer these questions flawlessly, as they come up in almost every sales interview:

• So tell me about yourself?
• Why do you want to work in this industry?
• Why do you think you'd make a good salesperson? Give me an example.

Ultimately, it is about fit. They may throw in a technical question but it'll be easy if you pay any attention to the markets. For example, "What's the 10 yr Treasury trading at currently?"

The 2 factors that drive sales are fund performance and brand recognition. The best salesman in the world can't sell a dogshit mutual fund that has bad long-term performance. With this is in mind, being at the right firm at the right time is the key to wholesaling. Imagine working for a large shop with great brand recognition, coupled with having several funds that rank well against their peers. You're riding on the gravy train because good mutual funds virtually sell themselves.

As far as hours go, most external wholesalers only work Monday-Thursday. Friday is typically an office day or dedicated to golf. In a typical day, a wholesaler will have a breakfast meeting, a mid-morning meeting, lunch meeting and then an afternoon meeting or happy hour. The "wining & dining" culture is eroding as regulatory pressure is increasing. Before the crisis, wholesalers literally had a blank check when it came to entertaining clients. Those days are over.

The only major downsides of wholesaling is the constant travel and pressure to meet sales goals. Being on the road 4 days a week isn't for everyone and believe me, it gets old after a while. In terms of sales goals, each wholesaler recieves a new target each year that is dependent upon the size of the territory and previous year's sales. If you don't meet goal, your commission is reduced. If the problem persists, you are fired.

At a decent firm, you can expect to make $250k-$1mm+.

I'll add to the above that fees are becoming more and more of a criterion when choosing funds.

The MF complex is commoditized - nothing separates American Funds, MFS, Franklin Templeton, PIMCO , etc. from one another. Performance and low fees speak volumes.

I agree 100%, fees are one of first things that investors look at. 401k plans and pensions have become VERY fee conscious, almost to the fact where low fees>performance.

krazyk: I'll add to the above that fees are becoming more and more of a criterion when choosing funds. The MF complex is commoditized - nothing separates American Funds, MFS , Franklin Templeton, PIMCO , etc. from one another. Performance and low fees speak volumes.

That is correct, and hence why the importance of relationships that you build for your book of business.

Great post all in all, I worked also for as an external and now I'm on the institutional side.

Anyone know someone/have heard of what IW is like at Lord Abbett?

bump looking to hear what people have to say about the above posters question, looking at a position at Lord abbett

Lord Abbett would be great, it's a household name which helps tremendously. I'm at a 30B shop in socal as an internal we make about 100-120k but externals 300-800k...cap is at 3M for them but doubt that will be attainable anytime soon. Nobody has mentioned Hybrid wholesalers yet- an "in between" role where you spend 1 week at the home office doing the internal work, sales calls follow ups getting meetings...then go in the field for 1 week and drive sales in person. Normally smaller budget, say 50k, and 150-200k comp but great to cut your teeth and be sure its what you want to end up doing. Only a few shops have hybrids though, maybe ~20% of them. In my opinion, one of the best kept secrets in finance is external wholesaling. Plenty of people look down on wholesalers for being essentially cheerleaders for fund families but if you can grin and bear it then smile, go home, and collect your half mil a year. It is very competitive though to go external, you need to be a true people person. Almost on the level of an actor or politician, which can be very annoying at times. Swallow your pride a lot, travel a TON. Anyways, its great if it matches your personality! Go for it if you have the opportunity and if external isn't your thing you'll have other opps after a year or two. Cheers

Appreciate you taking the time for questions, I hope you're still open to answering some. Im about to graduate from a non target school. I have no relative work experience and I am a CFA level 1 candidate. I have no desire to go into the external wholesaler/financial advisor route, I have more interest on the research side. However, I have an offer for an internal wholesaler job at a respectable insurance company. I planned on working here just for experience to get the 48 months while I take the CFA and get my foot in the door somewhere. What are the exit opportunities like from an internal? Specifically getting into IB or finding a research job? I'm great with sales, I just have no desire to be on the advising side as a career.

double post - sorry

I'm also interviewing for a number of internal positions. I think it may have been answered but is External definitively the only career move if I become an Internal? I spent several years at a big name bank in Wealth Management, as a Client Service Associate. I'm getting my MBA now in Finance and Marketing. Could an Internal potentially become some sort of Product Manager or Product Marketing Specialist?

Short answer...yes.

To elaborate on MC80's answer, if you work as an internal wholesaler at a big MF company, the opportunities are limitless. Given that you hustle, work hard, and network your ass off, you can transition into Product Management, Institutional Sales, Marketing, etc. Some at my firm have even worked their into a Trader/Research Associate position on a Portfolio Manager's team.

Two biggest things you can do for yourself is get the CFA and network.

Secondly, to add on to the above, an internal wholesaler position is a great way to get your feet into the Asset Management industry. Everyone needs to start somewhere - our current CEO actually started out as an internal some 20+ years ago, and I consider him to be one of the best CEOs in our line of work because he knows the business from the ground-up.

I know several people who have started out as an internal who have gone to become Portfolio Specialists raking in a comfortable $250-350k a year, working 40 hours a week.

Personally, I find that lifestyle to be much more attractive than doing the crazy 80 hr weeks in banking for that slim shot of making Managing Director .

I have a question regarding travel. How much travel does and internal & external do?

Internals travel about 2x per year in their assigned territory, usually to tag along with their external and get some exposure to clients. In your 2nd year, you may be lucky enough to represent your company at an industry conference. Some of those are held in really nice locales. If I had a choice, I'd fight tooth and nail to go to one in Las Vegas :)

Externals are on the road all the time. >80%

Internal wholesalers don't travel much at all. Maybe go to a few conferences a year (those hosted by their best flowing broker/dealer clients), and once in awhile go on "tour" with the external wholesaler to meet some of the "A" clients in the territory.

External wholesalers travel constantly. If you are in a densely populated territory, like a city, you will mostly be on the road during the day, but home most nights. If you are in a rural territory (or cover a large area because you're at a smaller firm with fewer wholesalers) you could literally live in hotels Monday - Friday. It's all over the board for externals, but you will be on the road constantly, the difference being whether you sleep in your own bed or not. Externals will also attend conferences for their best broker/dealer clients, as well as have to travel for home office meetings/conferences.

I have an opening interview in a few days with a firm that focus's on mutual funds, hedge funds and PE . Any guidance on what to focus on for the interview? What is best to convey to the interviewer? (I have two years of experience post grad from a state school)

Late on this, hope you're still somewhat available to answer. Before my question, thank you for all the insight, it has been much appreciated as a student considering this line of work.

Now for my questions. There has been a lot of discussion on external wholesalers territories/travel and then how so it impacts their lifestyle. My question is where or not externals have much say in choosing their territory? Is it straightforward and laid out when applying? Or do they have the opportunity to move after some coverage time? I'd presume the latter would be rather ineffective (from a firm standpoint), as they already would have a large network in one area and be ditching it for a more desired territory.

My second question is exit opportunities for IWs. I know external is the goal from a monetary perspective, but that comes with the road lifestyle. If you were to consider other positions (than external) what kind of timetable is the norm for someone to stay as an IW before moving up or out? You've mentioned 4 years and you're looking elsewhere, have you seen most others follow that timeline?

Thanks so much for your time. These answers have been very helpful.

You don't have much say, at least when starting out. If you are an IW you pretty much take the first open external spot and a good company will try to move you where you want to go in a couple of years if a territory opens up and you are hitting your numbers. Some territories will require you to jump on an airplane regularly, others you can drive across pretty quickly, it all dependent on the area of the country your in. Typically the more dense your territory the higher you can expect your quota. That's one thing a lot of people are overlooking here, THE QUOTA. if you don't hit the company numbers, you can plan on looking for another job...it's friggin stressful. Any sales rep that hasn't had a few sleepless nights in their career is either lucky or lying.

Normal time as an IW is at least 2 years I'd say. I did it in 1.5 but it took me quitting my company and coming back to do it (long story). And ideally I would have never started or stayed at my original company as long as I did if I had to do it again.

Interesting. Thanks for this resource, I'll pm u OP

Agree or disagree from someone in the industry (fratty brosih jock type who seems to be doing very well as a wholesaler). This is what he said to me.

"At some of these top asset managers, the sales guys can make more than the research analysts or portfolio managers. The sad reality is that there are a lot of smart and nerdy number crunchers out there who are relatively interchangeable. There aren't that many people that can sell consistently. Also, relationships aren't interchangeable."

Does anyone have insight into the compensation of firms like PIMCO / BlackRock ?

at PIMCO go on glassdoor: "account analyst" to "account associate" and "senior account associate" are the equivalent of internal wholesalers. "Account Manager" and " Vice president account manager " is the equivalent of an external wholesaler for them.

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Mutual Fund Wholesalers

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Introduction

A mutual fund is an investment strategy that allows investors to purchase a collection of stocks, bonds, or other securities. Funds are sold to the public through the sale of shares representing an ownership interest. Wholesalers market mutual funds to registered investment advisors, financial planners, family offices, broker/dealers, consultants, insurance companies, and other institutional clients—who then sell them to the public. 

Quick Facts

Median Salary

Employment Prospects

Minimum Education Level

Personality Traits

Compensation structure for wholesalers varies by employer. Some receive a base salary, plus commissions earned on sales; a salary plus an annual performance bonus; or an advance against future commissions rather than a salary.

External mutual fund wholesalers earned average annual salaries of $75,139 in 2020, according to PayScale.com. Earnings ranged from less than $55,000 to $186,000 o...

Work Environment

Wholesalers work in typical office settings. Their hours and the amount of required travel vary by position. Internal wholesalers work a standard 40-hour week and largely stay in the office, making sales calls, developing sales and marketing strategies, and following up on customer inquiries via the phone, videoconferencing, or e-mail. External wholesalers work away from the office about 50 to ...

Job opportunities for sales managers (a related career) who are employed in securities, commodity contracts, and other financial investments and related activities are expected to grow by 4 percent through 2028, according to the U.S. Department of Labor, or about as fast as the average for all careers. Opportunities for mutual fund wholesalers will be best at the largest funds. “Once a primary ...

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How Portfolio Analysis Transforms Mutual Fund Wholesalers’ Advisor Relationships

— Craig Pfeiffer, President & CEO - Money Management Institute; Financial Services Board Director/Advisory Executive

Over the past few years, asset managers have been moving away from a reliance on external wholesalers. The number of mutual fund wholesalers is actually shrinking. The reasons for this change are rooted in changes that have already occurred in other parts of the wealth management industry.

How investment i ndustry changes have disrupted all stakeholder roles #

Evolving customer expectations, regulatory change and the emergence of new digital technologies have revolutionized the financial advisor role significantly. The old ways of working are no longer effective. Transactional selling and pushing products are turn-offs for potential customers. The traditional, manual, non-digital approaches to practice management are too inefficient.

Recent generations of financial advisors have had to redefine their role . Their value proposition has also had to shift, in order to remain relevant to their clients, and competitive in their markets.

Advisors have now left behind the old ‘agent’ persona and evolved into true providers of advice to clients. Seeking to add value and build trusted relationships, they embrace the technologies and the partners who can help them get there .

How changes in the financial advisor role create challenges for mutual fund wholesalers #

The changes that revolutionized the advisor role, are now disrupting the wholesaler landscape. They aren’t interesting in dealing with wholesalers who are still following a decades old sales model. As one respondent to a recent NAPA-Net Reader Poll put it:

“The wholesaler that gets to know me and my practice, and solves for my needs is the most valuable... not enough good ones out there.”

Today, advisors have no interest in sitting through a dozen product presentations from wholesalers every month. Not, when any information they need is easily accessed online. There’s not enough value in those meetings for advisors.

The difference between the traditional wholesaler approach and what advisors are looking for has created a gap. One that is difficult to bridge—leaving many wholesalers struggling to capture advisor attention.

What do financial advisors want from mutual fund wholesalers? #

The gap between what advisors would like from mutual fund wholesalers and what those same wholesalers deliver is significant. A recent Cerulli study revealed that, while advisors are hungry for education, best practices and practice management help, what they are really receiving are pitches about investment products. The big disconnect is a misunderstanding by wholesalers around the best way to add value for advisors .

H ow can mutual fund wholesalers close the gap to advisors? #

The first step is to reimagine not just the way you interact with advisors, or even your offering, but to step all the way back and re-envision the wholesaler role. Perhaps “Wholesaler” is even the wrong name for the position today, as that name is more indicative of a middle-man function that inserts itself into a sales process.

Instead, what advisors really want, is not a mutual fund wholesaler but a tech-enabled business consultant . Someone who, like the advisor themselves, has transitioned away from old school sales strategies and is seeking to add value as a collaborator. Someone focused on helping advisors meet their business goals and provide even more value for their clients.

What does the new mutual fund wholesaler role look like? #

As one asset manager put it, “This year, I’m reconfiguring my sales team—philosophically. Getting away from the focus on sales tools and strategies, and re-inventing the team as a provider of high-value services to advisors .”

It’s an inversion of the traditional wholesaling mindset, away from product push and sales, towards advice, consultation and partnership. Shared and communal instead of promotional. Service-oriented rather than narrowly focused on product information.

Download the case study to find out how one top wholesaler used this strategy to transform into a tech-enabled business consultant that advisors were excited to work with.

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What do Financial Advisors Want from Mutual Fund Wholesalers?

How a Top Wholesaler Accelerated Sales Through Product Positioning

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Strategies to Grow Your Mutual Fund Distribution Business

Posted On Monday, Apr 08, 2024

In the last decade, the Indian mutual fund industry has seen phenomenal growth. The net AUM has nearly quadrupled from Rs 10.11 trillion in May 2014 (since the Modi-led-NDA government was voted to power) to Rs 50.77 trillion as of Dec 2023.

MF Industry Growth

India’s mutual fund industry AUM-to-GDP ratio - which represents the penetration of mutual funds in the economy - today is around 15% compared to 7-8% a decade back. Although this ratio is low compared to the global average of around 75%, a remarkable increase in AUM is quite evident.

Today, interestingly, individual investors (retail and High Net worth Individuals) hold a relatively higher share of the industry’s assets (59.2% as of November 2023).

Moreover, individual investors are holding a dominant portion (82%) of their hard-earned money in equity-oriented mutual fund schemes – in other words taking risks -- to better returns than parking money in some of the traditional investment avenues.

Pie Charts: Investor Categories Across Scheme Types

Data as of October 31, 2023 (Source: AMFI )

The B30 locations, (i.e. beyond the top 30 geographical locations) are also driving inflows into mutual funds. As of November, 2023, 26% of the individual assets are coming from B30 locations.

Investors, as you know, are investing via the Systematic Investment Plan (SIP) and lump sum mode. SIPs particularly have become a popular choice for making regular and systematic investments in mutual fund schemes.

The folio count (also known as the mutual fund accounts) thus has increased from around 4 crores in May 2014 to approximately 15 crores in 2023.

Graph 1: Increase in mutual folio counts over the years

Data as of June 30, 2023 (Source: AMFI )

How MFDs add value to an investors’ lifecycle?

An intriguing fact is that many retail and HNI investors still depend on mutual fund distributors (MFDs) or Independent Financial Advisors (IFAs) to make investments. Distributors (including banks) account for 57% of the Indian mutual fund industry’s assets as of October 2023. This goes to say that MFDs and IFAs have an important role to play.

Graph 2: Distributor v/s Direct

Data as of Nov 30, 2023 (Source: AMFI )

Trail commissions are ongoing payments made to distributors as long as the investor remains invested in the mutual fund. So mutual fund distributor commission structure varies across AMCs and schemes. Assuming a distributor successfully gets an investor to invest in an equity mutual fund investment with growth of 12.64% CAGR (compounded annualized growth rate) using SIP investment of Rs.10,000 per month for 15 years.

The above table is for illustration purposes only. Returns calculated by taking mean of 10-year rolling returns between 01/06/13 and 30/05/23 for Equity Funds (Sensex). Past performance may or may not be sustained in the future and is not a guarantee of any future returns.

What MFDs and IFAs need to do?

⮚ Earn the Trust and Confidence of Investors/Clients

This is paramount. In general, investors are fed up with the rampant mis-selling tactics going on, particularly by banks who place their interest at the fore. Sadly, quite a few banks push or sell mutual fund schemes that earn them better commissions and seldom care about what is appropriate for the investor.

Independent Financial Advisors (IFAs) and Mutual Fund Distributors (MFDs) need to distinguish themselves from the crowd by standing for honest, ethical advice, putting their client’s interests at the fore and handhold them in the journey of wealth creation and accomplishing the envisioned financial goals.

As Douglas Adams (an English writer and humourist) once said, “To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.”

Unfortunately, unlike in the medical profession where doctors take the oath to practice the profession with integrity, honesty, humility, and compassion to serve their patients first, there is no such oath for investment professionals. But the truth is, investment professionals have fiduciary responsibilities to fulfil, and therefore, must follow ethics and integrity during their service to clients. In a sense, IFAs and distributors must act as ‘Financial Guardians’ to investors/clients.

Investors expect transparency, the best disclosure norms and the hope for confidentiality from IFAs and mutual fund distributors. While, of course, the regulator has regulations in place for this, much of it must come consciously from IFAs and distributors from within.

Furthermore, as you know there is no one-size-fits-all approach , IFAs and distributors need to ensure investors/clients receive ‘personalised’ prudent advice. Imagine going to a doctor who gives you a prescription without taking cognizance of your physiology and medical history – the results would be disastrous, isn’t it?

Hence, earning the trust, respect and confidence of the clients is essential, whereby the value of your advice, as an IFA or distributor, is well-recognised and well-respected.

⮚ Provide Need-Based and Research-backed Financial Products

Investing is an individualistic exercise. Therefore, IFAs and distributors must make a conscious effort to offer products that align with the investors' risk-taking ability, broader investment objective, the envisioned financial goals and time in hand to achieve those envisioned goals. In this respect, online risk profiling and asset allocation tools may be used.

Besides, it would be sensible to back the recommendations with access to thorough and unbiased research reports, as opposed to past returns and/or mutual star ratings given on historical performance, which are in no way indicative of future returns.

Broadly here are some parameters to give weightage to select mutual funds for the client’s portfolio:

• Systems & Processes

• Market cycle Performance (bull and bear phases)

• Asset Management Style (wherein the investment mandate and strategy are considered)

• Risk-Reward Ratios (because for every level of return, the fund generates, there is a certain level of risk)

• Performance Track Record

Returns or performance track record should be the last thing to be considered.

"The essence of investment management is the management of risks, not the management of returns," said Benjamin Graham, the father of value investing.

Further, given that the world of finance and investments is ever-changing, IFAs and mutual fund distributors must keep abreast with the latest developments.

⮚ Technology Adoption

The lockdowns of the COVID-19 pandemic introduced us to a new way of practice. To communicate with investors/clients, many of us used WhatsApp, Telegram, emails, and even conducted client meetings over Zoom, and Webex, among many such tools. Even now while there isn’t any pandemic or restrictions, IFAs and distributors must continue to use these tools, especially when offline meetings aren’t possible.

Other than apps for meetings, to execute or perform transactions for investors/clients, go green to reduce paper and cost of servicing clients. In this day and age of fintech, many platforms exist to execute transactions online. However, MF Utility (MFU) and BSE StAR MF, are among the popular ones offering convenience to investment advisors and mutual fund distributors. These platforms are integrated with Registrar and Transfer Agents (RTAs), viz. CAMs and Karvy, plus power-packed with features that potentially help improve the service capabilities of IFAs and distributors with 24x7 universal online access.

Apart from using the aforementioned transaction platforms, IFAs and distributors could consider using worthy practice management software and Customer Relationship Management (CRM) tools to serve investors/clients efficiently.

Note, adopting technology shall make client onboarding easy and faster, increase service accessibility almost 24x7, help have better control, eliminate human biases, enhance transparency and efficiency, plus the reduced cost of servicing. Simply put, the use of technology would be a win-win for you, the IFA or distributor, and the investor/client.

⮚ Effectively Use Social Media

Social media, if used correctly, could help in reaching a wider targeted audience and grow business exponentially. Today a lot of individuals - across age groups - are spending time online. Thanks to smartphones and affordable data plans.

IFA and distributors can leverage this by devising a sensible digital market strategy to reap dividends. Social media platforms or channels, such as WhatsApp, Telegram, Facebook, and X (earlier known as Twitter), may help reach out to new prospects. The decision to choose a suitable promotional platform must be based on the demographics, i.e., the target audience using that social media channel.

Propagate a sensible idea rather than pushing products or asking investors to invest through you. In this respect, as an IFA or mutual distributor you could share simple explainers in an infographic form, or articles or guides around prudent investing that would arouse the interest of investors.

LinkedIn, for example, could be used to share case studies of investors/clients with fellow IFAs and distributors.

With valuable views articulated on social media, brand equity for self could be built, which could entice investors to seek your services.

Why Consider Becoming a Mutual Fund Distributor with Quantum Mutual Fund?

Quantum Mutual Fund helps investors achieve their financial goals with simple solutions across three key asset classes-equity, debt, and gold. Plus, we have ELSS for tax saving and ESG Fund for socially responsible investors.

For mutual fund distributors, Quantum Mutual Fund provides all the marketing collateral, access to our DIT (Distributor Initiated Transaction) platform, fund manager insights (through webinars and articles), and facilitates learning and educating your customer on the concepts of investing.

The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

Above article is authored by Quantum.

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Wholesaler Masterminds®

Where Good Wholesalers Become Great Wholesalers • Wholesaler Coaching • Wholesaler Training • Wholesaler Keynote Speaker

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• Blog Archive

Wholesaler Masterminds Client Testimonials

“The coaching you gave me early on (ideas, strategies, processes) helped me raise over 2.5 billion during my time at my former firm.

This really allowed me the freedom and resources to be able to make career decisions that were in the best interest of me and my family.”

-Brad G., Midwest Mutual Funds Wholesaler

“This has been a phenomenal experience working with you on creating a Peerless Value Proposition, among other topics.

I’ve been challenged, I’ve grown professionally and I am confident in the work we have done together, as I am seeing the results. The PVP alone is garnering meaningful attention from clients and prospects alike.

I cannot thank you enough!”

-Southwest Mutual Funds Wholesaler  — Focus Fifteen Client

“Thanks again for all the time and effort spent with me the last six months. My first PVP email sent was met with an amazing response from a principal at a multi-billion dollar RIA Firm I’ve been in beginning stages with.

I’ve learned a lot from you and I really appreciate the helpful material and efficient meetings each session. ”

-Michael W., NoCal, OR, HI  — Focus Fifteen Client

“I know our sessions are over, but I just wanted to say thanks.

Had a great performance review yesterday, best cash flow in the territory’s history and learned a ton.”

-Adam B., Pacific Northwest  — Focus Fifteen Client

“I came to Rob as an experienced outside wholesaler, who found myself wanting to take my practice to the next level.

I didn’t feel that my approach to wholesaling was fundamentally broken, however I knew that I needed to be more efficient with my time and effective with my advisors.

Rob certainly delivered!!

He not only helped me with my time management, follow up process, and PVP, he also helped coach me through the new skill of virtual wholesaling.

I saw my business grow 30% during our 6 months together, which happened to also be during a pandemic.

It doesn’t matter if you are a fearless rookie or a savvy veteran, you can definitely benefit from working with Rob Shore.”

-Mike F., ETF Wholesaler Tennessee

“I can honestly say that Rob has changed how I look at the profession of wholesaling.

As a newer wholesaler in my territory, my main focus was product and moving the needle as quickly as possible. After my first conversation with Rob, I realized that “pushing product” isn’t always what our clients need most.

After developing a solid PVP and crafting emails and calls around that specifically, I have been able to schedule more and more virtual meetings.

We worked on everything under the sun that a new wholesaler might need: PVP, time-blocking, how to close the sale, crafting effective emails, and how to structure in person meetings.

I can’t thank Rob enough and am very excited to charge on with what I’ve learned over the past 6 months!”

-John., New England

“After 10 years as a wholesaler and two in sales management, I was seeking coaching.

Rob was a great fit. He pushed me out of my comfort zone, gave me great ideas, and made me a better sales manager.”

-Jack – Divisional Sales Manager

“As a new wholesaler, the hardest part of the job is everything that takes place in the peripheries. When I saw the opportunity to work with Rob and other “rookie” wholesalers, I jumped at the chance.

My time working with Rob helped to create focus (PVP-Peerless Value Proposition®), discipline (process), organization (Rotation Builder), and actionable ideas that work (marketing and meeting preparation). He also created a great space for rookies to come together and share.

This is just the beginning and I am now better equipped to be successful thanks to Wholesaler Masterminds.”

-Ian R. Moreau – Texas Wholesaler

“As a new external, I learned from Rob in a few months of coaching what would have taken me years (and maybe decades) of being on the road.

The resources available through Wholesaler Masterminds provide huge returns, and I am confident they will continue to pay in dividends.

I am so thankful to have been connected with Rob‘s coaching and his thoughtfully curated materials – I would highly recommend developing a relationship with him for wholesalers new and old, successful and struggling, internal and external.

Rob can provide substantial value to any and every wholesaler out there.”

-Rebecca Pearson, CFP®, Florida Wholesaler

“When we started coaching, in my new role in 2015, my territory had done roughly $17 million.

I finished 2018 at just over $449 million in total sales, a record year for me. We’ve come a long way in four years!

I can attribute a lot of my success to your Wholesaler Masterminds® Business Plan , your Wholesaler Masterminds® Rotation Builder and your coaching” .

-Matt L., Mutual Funds Wholesaler

“The year I spent working with Rob changed my approach to wholesaling. He helped me focus and generate actions that worked. I learned how to let go of the fear and insecurities that had been holding me back.

Today I am where I dreamed of being and am so thankful for the ways he helped me in making this dream a reality.”

-Kristen, Mutual Funds Wholesaler.

“Working with Rob helped to refocus my approach to wholesaling in an ever changing landscape.

Not only did it help my overall sales but he helped me become a more valuable partner to my clients”

-Chris W., Northeast Mutual Funds Wholesaler

As iron sharpens iron, so one man sharpens another- you sharpened the saw for everyone to enable all to cut through the complexities of the business and the roles we have.

Masterful job presenting on your various areas of expertise. Thanks again for your work within the wholesaling community and for sharing in such a straightforward manner that it allowed all of us to light our candles at your knowledge. And, now, off we go to carry the torch in our respective territories more well equipped to serve clients thanks to your contributions.

-T.V., Mutual Funds Wholesaler

If you are looking to improve your wholesaling, add more value to your advisors, set yourself apart from the “sea of sameness”, gain more respect from your clients, market more efficiently, have a sounding board to the maniacal life of a wholesaler, or gain more insights into how your personality profile and your genetic wiring positively and negatively affect your results call Rob Shore.

Wholesaling continues to change, you do not know it all, many of us (me included) haven’t gone to ‘school’ in a long time.

Rob will sharpen your tools, dust off your old double breasted suit ways and help you re-imagine your inner genius. What do you have to lose? All famous athletes and many CEOs use a coach to improve. Why shouldn’t you do the same?

Rob has great ideas that are relevant to your practice, but come prepared to execute.

-Toney Sebra, NoCA Wholesaler

270 days 9 months 3 quarters 30+ calls Dozens of emails

The journey of taking you on as a coach has been a great one.

You’ve had a unique vantage point into my career at a time when things were at their toughest.

I’m glad to say I stand here today a better wholesaler, a better sales professional, a better person after having invested the time together.

-Joe F., Texas Wholesaler

I truly appreciate how Rob worked with me and drilled down to my particular needs and areas of improvement.

He has a wealth of experience and knowledge but, more importantly, he tailors that to my situation.

I have seen a huge improvement in my process and sales numbers and strongly recommend his coaching to wholesalers who want to step up their business.

-J.K., Midwest Mutual Funds Wholesaler

Rob presented to my team at our National Sales Meeting, and he didn’t disappoint. On the contrary, Rob was eloquent, helpful, and spot on, in sharing his knowledge of the practice of wholesaling.

Through his years of studying, leading, and coaching wholesalers, Rob has developed a process to take wholesalers from the Sea of Sameness to Master Wholesaler.

Through his pre-meeting preparation, he tailored his presentation to my team, specifically addressing our sector and company issues.

I started wholesaling mutual funds 24 years ago: Through Rob’s presentation to my team, it became apparent to me that I (and my team) can be so much better at what we do. If you’re a seasoned wholesaler, you need to engage Rob to sharpen your skill set…and if you don’t have years of experience, you’d be wise to engage Rob to help you build the foundation for your future success.

I had high expectations for our session with Rob, and he exceeded them.

Many thanks, Rob.

-Jeff Kremin | Executive Vice President, National Sales Manager

Rob, I really do appreciate your coaching and ideas.

My internal and I hit our sales goal for the year already, I’m having the best year I’ve ever had, and should take the top sales award at our firm for 2015.

The coaching does certainly help sharpen the sword.

Thank you again!

—Satisfied Wholesaler, FL

Having read Rob’s Sunday Night Email for years, and eventually buying his first book, Brotherhood of the Bag, A Wholesaler’s Handbook , I realized that moving to a new firm gave me an opportunity to improve the way I’ve been doing things over the years.

Based on my email and book experience, I pursued a coaching relationship with him. My goal was to work on four key areas:

1) improve my follow-up process, 2) integrate more effective advisor entertaining into my practice, 3) learn to work smarter not harder, 4) and use technology to improve both my process and my organization.

Throughout my coaching experience, Rob and I tackled each of these areas using his tools and insights. The result is that we accomplished everything I set out to do.

My monthly sales have doubled from where we started. Each month’s sales have been better than the last, and each quarter better than the one before. It is my coaching relationship with Rob that helped me achieve these results.

I’m celebrating my 26th year in the business and know now that old dogs really can learn new tricks, especially if you have a coach that understands what it means to carry the bag, can share great ideas, and hold you accountable for accomplishing the goals that you set for yourself.

Thank you Rob!  

—Matt L., Minneapolis, MN

Thank you Rob!

As a life insurance wholesaler focusing on the institutional and bank marketplace, I have been successful over my twenty-year career however, my world is rapidly changing. I had been actively looking for an advantage to help me continue to succeed in my market, and your program is exactly what I was looking for.

Your insights and expertise have given me the edge I need to reach new heights as I continue to serve those advisors that rely on me for insurance planning services. Thank you again.

—Trey F., San Diego, CA

As I told you when we first spoke, I have been at my firm for two and a half years and moved to my 3rd territory in January. When I came to you seeking coaching, I did so because I wanted to make an immediate impact; my goal was to be a top territory.

When I first took this territory over it was ranked 33 out of 33 after month one, now 9 months later I currently rank in the top 10 at my firm.

I can’t thank you enough for the coaching and guidance you provided in helping me have great success. Establishing a PVP, putting process in place to run my business more efficiently, and better structuring the way I run my meetings have led me to the top of the sales report.

The coaching you provided not only met, but exceeded all of my expectations.

Anyone looking to take their business to the next level would greatly benefit from your program.  

—Appreciative Wholesaler, Texas

Rob Shore’s coaching program refined my existing skill set but most importantly, he helped me develop the tools I didn’t know I didn’t know.

After completing Rob’s program I now have the knowledge to be as efficient and effect as any wholesaler in the country.

Rob truly gives you the compass to help navigate the rest of your career.

—Ben C., Illinois Wholesaler

I worked one-on-one with Rob to get my practice to the next level. The ideas and conversation he provided were well worth the time and investment, and I truly appreciate everything he did for me during our time together.

Whether you’re just getting started or you’re a seasoned wholesaler, I highly recommend Rob.

—Justin T., Investment Management Wholesaler, Ohio

Even after 20 years of successfully wholesaling with some great firms, I knew I needed to hit the re-fresh button on my sales process. Rob challenged me weekly and helped me go to a new level.

If you’re looking for an edge (you may be in the wrong business if you’re not) and you want to stand out in the “Sea of Sameness”, I highly recommend Rob.

He is definitely the wholesalers’ “Trusted Advisor”.

—Ned R., Mutual Funds Wholesaler, Denver

I am coming off of one of the best year’s my territory has ever had and it is a direct result of Rob’s coaching and processes. Having a record year might not be unusual for some but for me, it being my rookie year, the results were exceptional.

Many believe that the willingness to work harder than most is enough but it is unfortunately not the case. What Rob brings to our profession is a process that makes us work smarter, more efficiently, and with confidence. If I have learned anything it is I have to be more than a product if I want the income and the longevity realized by top wholesalers.

And even though I would love to keep his knowledge a secret, the truth is if we all approach advisors the way Rob believes we should, it would benefit our wholesaling profession in the long-run as our advisors would see us as valuable resources versus a commodity. If you are looking for someone to help you take your performance to the next level, Rob is someone worth serious consideration.

—C.N., South Central U.S. Mutual Funds Wholesaler

I’ve been an external wholesaler for 10 years and have worked with Rob Shore as a coach for the past 9 months. I retained Rob to improve my process as a wholesaler and increase sales. I felt that my sales should have been at a higher level since I’ve been wholesaling for a decade and knew that hiring a coach would help me get to my goals.

From our first coaching session I knew this was one of the best investments I’ve made into my career. Rob gave me insights into targeting the right advisers, building a rotation that I can stick with, and “outside the box” ideas that separated me from other wholesalers. From the first day, Rob asked me to identify my best advisers and prospects.

Although this was a difficult task, to narrow down the thousands of advisers to a hundred or so, I know now that I had increased focus and penetration in my territory.

Slowly, I saw sales increase as a direct result of taking this action. Rob also encouraged me to tighten my rotation and not “be everywhere…all the time”. I designated far-reaching areas to my internal wholesaler and I showed up in areas more frequently and my sales improved in those areas significantly. Finally, I believe that Rob’s “outside the box” ideas were invaluable in separating myself from the competition. Whether its ideas for gifts to an adviser, events that are memorable, or follow-ups after an appointment, my memorability quotient was raised significantly.

If you’ve been a wholesaler for a year, 10 years, or 25 years, I would encourage you to work with Rob as a coach. Rob is extremely knowledgeable about our industry, how an adviser thinks, and he is a consummate professional. Best of all, I saw an improvement in my sales and I know my career has greatly benefited from working with Rob.

—Laura O., Mutual Funds Wholesaler, Colorado

Working with Rob is a worthwhile investment in your business.

He challenged me to look at and reevaluate everything I was doing. The results have been outstanding.

Thanks to Rob I now have a set in stone a process of what I have to do each and every day to be the best I can be in my business.

If you are thinking about working with Rob, I strongly encourage you to pick up the phone and call him!

—Tennessee Wirehouse Mutual Funds Wholesaler

I have been a wholesaler for 20 years. Even though my personality is such that I’m always willing to try new ideas, I felt that I was not being exposed to enough of the most cutting edge ideas in the wholesaling space.

I also wanted an accountability partner to make sure the ideas I developed were fully implemented in the proper fashion.

Rob has an extensive background in the financial services industry. Specifically around wholesaling, he has done it all.

As he and I worked closer together I discovered his passion for my business was just as high as mine. He wants to see you win and transform your practice.

We developed several systems that free up valuable time yet help me become more memorable with my clients. We developed a system to help make each of my appointments more meaningful. We developed ideas on follow-up, scheduling and even developed my own peerless value proposition.

If you have been a wholesaler for 6 months or 26 years I truly believe you will benefit from your experience with Rob and Wholesaler Masterminds.

—Dan G., Midwest Mutual Funds Wholesaler

I worked with Coach Rob’s Wholesaler Masterminds Group Coaching when I was a wholesaler.

When I became the National Sales Director, I retained Rob for Management Coaching , and also asked him to run a Wholesaler Masterminds Group that was exclusive to my wholesaling sales force, because I thought that the group was so useful for me.

Rob always brings terrific ideas to the discussions. He has helped me to lead my team and to interact intelligently and efficiently with my senior management team.

He’s made my team better, and I’ve heard nothing but positive feedback about the calls from our wholesalers.

I strongly encourage anyone looking to become better at their craft to engage Rob – you won’t be disappointed.

—Russ Nesevich, National Sales Director, Resource Real Estate

I greatly enjoyed my time working with Rob and found him well worth the investment in my future.

From our initial conversation, he took the time to understand me, my practice and my goals and helped me understand where, with a little bit of focus, I could make the biggest impact in my business.

He helped me hone my value proposition and think differently about the messages I was delivering to my clients to better engage them and separate myself from the competition. He also helped me create processes to systematize my business and approach to wholesaling.

I have been wholesaling internally and externally for more than 10 years and would recommend Rob to anyone who is just starting out or needing a few extra ideas in the midst of a longer career.

—DJR Nevada

Over the course of the last three years I have had the opportunity to work with Rob in his Priority Partner Coaching program . As we have had in excess of 100 discussions, I can offer this insight without hesitation: Rob knows wholesaling and the art & science of succeeding as a wholesaler. He is both insightful and creative – two qualities that worked well for me as his client.

As we left no stone unturned in my practice, my only regret from the past three years is that I have yet to implement all of the concepts and ideas we discussed – and that is simply because of the shear volume of material we covered together.

If you are looking for an outstanding coach to assist you in transforming how you do what you do, Rob’s the coach to work with!

—B.G. Indiana

Last year, business was great but I felt like I had plateaued. Great stories, great clients but not a great work-life balance.

As good as things were, I felt sales should be double relative to the effort I was putting in. Simply put, I was not running an efficient practice.

I knew of Rob and his background so I decided he would be the coach who could help me take it to the next level.

I was right.

Rob peeled back the layers on every piece of my practice and from prospect to client helped me assess, change and create processes that would set the framework for a successful (and less stressful) wholesaling career.

A great investment for me, thank you Rob.

—Mutual Fund Wholesaler, Northern California

I hired Wholesaler Masterminds and Rob Shore to reinvigorate both my practice and myself. As a career wholesaler I found that, frankly, I had gotten lazy and comfortable, which I knew would not allow me to break through to the next level of success.

After spending the last six months with Rob, I feel that I have gained a host of new tools and insights that will allow me to improve my practice – and to do so in a way that, when fully implemented, will allow me to truly scale my business.

If you are considering coaching I highly recommend Rob’s Priority Partner Preferred Coaching program.

—A.M., Orange County, CA

Rob’s coaching took me out of my comfort zone, and in doing so made me a more effective and memorable wholesaler. I would recommend his services to anyone who is looking to take their career to the next level.

In 180 days my sales were up 97% – I couldn’t have achieved it without his guidance.

—Texas Mutual Funds Wholesaler

Thanks for all you’ve created.

I am more motivated than I have ever been, and old dogs can learn new tricks.

—Matt L., Minnesota

The coaching that you provided this year had, and will have, a real impact on my wholesaling career going forward.

—John A., Illinois

Since working with you on some of my marketing efforts, my sales are up 90% , I hit my corporate goal for the year in July, I made my leaders trip, I have been number one in sales two months this year, and am in the top ten of my company.

Not bad at all!

—William J., New Jersey

I wanted to thank you for putting together the “Rookie Wholesaler” coaching group . I found the lessons and topics that we covered to be timeless and very relevant to my career now and into the future. I am a year in with my new role as an external coming from the internal sales role and felt that the material we covered has put me light years ahead of my other competitors (both new guys like me and the “veteran” wholesalers).

Thanks again for such an informative class, I feel it was worth every penny and then some as I had two of my best months since I have been out in the territory. I have only implemented some (there are so many) phenomenal ideas however, I have a great deal of notes that I will continue to review and work into my process to take my game to the next level and stand out from the “sea of sameness.”

I look forward to working with you in the future.

—Mark T., Kansas City, MO

Thank you for all of the knowledge you bestowed to me, I really feel like I have learned some great things that will make me a better wholesaler moving forward.

I am very grateful for that.

—Zach G., Knoxville, TN

I’ve learned a great deal [in the Wholesaler Masterminds Rookie Group ] and feel the time spent was incredibly valuable, especially for the PVP, follow-up process, and advisor entertainment ideas.

I want to thank you for your tutelage, and I look forward to the potential of working with you in the future.

—Pete B., Boston, MA

I started working with Rob in October 2011. I had been wholesaling for less than a year and wanted to grow my territory in a very short period of time. Rob’s knowledge of the industry helped me create skills that were invaluable to my job. His outside the box thinking has gotten me in front of more top producers than I ever imagined.

My success and growth would not have happened without partnering with him!

I highly recommend his services to anybody looking to grow their business.

—Jeremy, Minneapolis, MN

I started work with Rob early 2012.

What happened over the next 10 months was that I had a record year in sales, earned my incentive trip, and had more fun Wholesaling than I’ve had in 10 years.

If you’re looking to grow your business, simplify your process, and be more efficient, then invest in Rob Shore’s program.

—John, VA Wholesaler with top tier firm & 15 years experience

Thank you for a great meeting yesterday in Boston . Definitely one of the best sessions in a very long time!

Looking forward to implementing a number of ideas.

I reached out to you because I wanted to take my business to another level. There is no question your Peerless Value Proposition® concept will help me accomplish that. PVP is a differentiator. I am amazed at your ability in just a few phone calls to help me come up with something so valuable. Thank you very much for your time and your help. I sincerely appreciate it.

Rob is a great provider of guidance, insight and perspective!

I would recommend his services to anyone who is looking to succeed.

Thanks again Rob for all your help this year. It was a pleasure working with you as well!

I hope to be able to set up something again next year.

—Brian P., TX

I just wanted to take a moment and tell you how helpful I found your sessions to be. Forcing me to think in terms of my entire year rather than just running from appointment to appointment allowed me to effectively manage my territory rather than just put out fires. I also found our sessions to be therapy as it allowed me to voice my concerns to an open minded third party which often provided me with another point of view that was always helpful. It is no doubt that my sessions with you made me more successful and helped develop a game plan for sustained success rather than hoping for another good year.

I would highly recommend to anyone in our business that wants to develop a plan for success to consult with you.

—Don H., FL

I’m a 30 year old first time internal wholesaler who is just getting his feet wet in this end of the business. Right out of high school I became licensed Series 7 and 63 at age 18 and I’ve been a stock broker for most of my career thereafter. After a much needed yet brief hiatus from phone sales, I got an opportunity to join an 80+ year old B/D, mutual fund and life insurance company as one of the first hires on a brand new sales desk.

I can’t begin to tell you how appreciative I am for the advice and guidance you have shared on Wholesaler Masterminds. Especially your top 76 Great Questions Wholesalers Should Ask Advisors was extremely helpful. I just wanted to personally thank you for being such an important source of insight on this challenging and competitive profession. I have so much more to learn as I go since all I have known is selling to the end user and being 100% responsible for my own paycheck. And now since I’m essentially an intermediary in terms of generating that new business, your outstanding tips and trade secrets has been tremendous. Thank you once again!

—Nick F., NY

First I was totally impressed by the wholesaler turnout, it was about 180-190 people which was twice what we had the year before when I was on the panel in Las Vegas with two other industry professionals. The evaluation by the audience included comments like “valuable intelligence, passionate speaker and great slides”. As you know wholesalers can be a tough crowd when it comes to rating speakers but you received a 4.19 out of 5 when asked “if content was of value”.

On behalf on the National Organizing Committee thanks again for making the long trip to the East Coast and for a great job of presenting and educating.

The industry needs a lot more professionals like you.

“As a new wholesaler, Rob offered tremendous insight into several key ideas revolving around practice management including setting an agenda and tracking your follow up. Although these seem like simple tasks, implementing Rob’s ideas have been instrumental in allowing me to run my territory in a more focused manner.”.

—Mike G., IL

The time invested in Rob’s session was absolutely worthwhile, and we recommend him highly.

“Transformational to my process, approach, and sales results; this is what being a private coaching client with Rob has done for my business.

The past six months working with Rob has pushed me to reexamine long held beliefs in how to effectively manage and build my business. Rob’s depth of knowledge on connecting with advisors, and his passion for pushing me to consistently get better each day, provided me with several break through moments that have put me on track to take my business and advisor relationships to extraordinary heights.

Regardless of your experience, if you want to become a truly memorable partner with your advisors, take the first step by talking with Rob Shore about how personal private coaching can benefit you”.

—Bryan Harasty, IN

Rob, my colleagues and I so appreciated and benefited from your presentation in Dallas this last week.  I took on your challenge for us to create our PVP.  It (happily) forced me to revisit my strengths and weaknesses; it persuaded me to pick the strengths that would be best promoted in a short PVP.  I have a draft and I will finish it this week.  I look forward to field testing it, perhaps objectively with a new contact and perhaps more creatively with existing producers.

You provided wonderful value this week.

“There are many quality wholesalers in the financial services industry, Rob Shore can teach you how you can move beyond the norm, stand out from the crowd, and be one of the best. Rob’s mixture of experience, enthusiasm, and passion can help any wholesaler not only be successful, but sustain that success over many years.

Rob teaches wholesalers how to create a winning formula no matter what product they are selling. Indeed when working with Rob you learn that the product is you. Rob can help you craft a specific message about what value it is you bring to the table when working with advisors, how to use this value proposition to build relationships, and ultimately win business from the competition.

I highly recommend Rob Shore to any wholesaler aspiring to be the best.”

—Brad Murphy, MA

‘Knowledge is power but applicable knowledge creates wealth’

-Kevin Unterbrink

“I have learned invaluable skills in my coaching sessions with Rob. I have gained many new insights on how to better focus my time and efforts to continue the growth of my business and increase my sales in my region. I am where I need to be to continue my sucess in my carrer.

Thank you for all of your time tested ideas and for helping me refocus on tasks that matter and drive business growth!

I owe it all to you!”

—Jason McGrew, KY

“Overall, the program was great, and broad enough to touch on the major components of wholesaling.  There are other topics that could be covered, but I found plenty of food for thought on those you selected. Each individual session’s content seemed just right to me.  If you repeat these sessions, I’ll join if there are other topics. You did most of the talking, and the only thing that could’ve made the Semester better would’ve been with more interaction and Q&A from participants. But-we know that drills’ challenges.

I found all your information very useful in refining what I’ve historically done, by filling in the blanks of my processes.

Honestly, you found a way to cram more tactical concepts and ideas into my brain than I’ve received from  the 4 major Firms I’ve wholesaled for in my 20 years.  In my opinion, all wholesalers benefit from constantly learning about the business of the wholesaling business, but, unfortunately, remain overwhelmed by the product information that is mandated to be used.

Every Divisional Manager should encourage the use of your services.”

“Given the recent economic downtown I was faced with finding a new career opportunity. After 10 years in the business I took this opportunity to work with Rob to help sharpen my skill set, hold me accountable, and keep me prepared though my job transition.

After one coaching call with Rob I knew I found something special. His passion for the business is without question. Once Rob helped open the door for an opportunity it was up to me to demonstrate my skill set and why I will be the best candidate for the position. I got the job! and look forward to working with Rob on bringing my business to the next level.

Thank you Rob!”

—Josh Wyatt, IL

“Fresh perspective, a renewed sense of excitement for my career, and endless unique ideas are all the things I took away from my individual coaching sessions with Rob. Whether you’re a first time wholesaler or have been in your territory for a long time, Rob offers customized coaching to the goals that matter most to you. Working with Rob is definitely a worthwhile investment in your business!”

—Kelly Apple, TX

“After 16 years in the business I started to get stale in my approach. After a few one on one consulting sessions with Rob he not only helped me change my business plan, he helped me completely change my business model. I have never before been more excited about my potential in this business and cannot wait to see how my business will increase in 2011.

I cannot thank you enough for all of your help Rob.”

—Mike Malloy, AZ

A blog and Sunday Night email reader wrote:

I get a lot out of your content and your groups. I was out of the game for two years and am grateful to be wholesaling again. I was lucky my DVP gave me a chance after such a gap in employment. I subscribed to your group and got back in touch with an old colleague who put me in touch with someone at who got me in touch with the hiring manager. I aced the interviews, 7 to be exact but without finding my old colleague I wouldn’t have known about the job or who to call. As you can imagine after two years of being out of the field I was starting to lose my confidence but I kept reading your posts which reminded me of a lot of the things I did on the road. I knew I could still be successful. I took over the region at 500k a month, I am at 4 million this month. Its my fourth month in production.

Long story short, thank you.

You are making a difference

“Over the last few months of our Wholesaler Masterminds calls I have been able to gain valuable insight into wholesaling in general, but more importantly a valuable insight into me as a wholesaler.

• What sets us apart?
• What makes us more or less effective?
• How do we position ourselves as a real value to our clients?
• Do we work towards our clients needs and objectives, or do we push our own agenda on the client?

These are all topics and discussions that have been shared on the calls and the give and take has made me a better wholesaler. It can never be understated that we continuously learn from our peers no matter what “product” they are selling, whether it is life, annuities, funds or LTC…..selling is selling.

Rob masterfully facilitates these calls and maintains the proper balance to ensure we as a team are meeting the call objectives. I highly recommend any wholesaler, in any product line, to take a look at Wholesaler Masterminds.

The worst that can happen is you will learn something new”

—Patrick Kane, MA

“Rob has amazing ideas to help you grow your business – it’s up to you to figure out how to put them into action. In one case he suggested a promotion and our advisers loved it. We had at least 50 inbound calls (no exaggeration) over three weeks just to inquire!

The promotion also facilitated a business conversation with 170 other advisers. It was amazing too see a small conversation starter lead to big business opportunities.

It is a promotion that has been, and continues to be, a huge success!

My time and money spent in Wholesaler Masterminds has been worth every penny – and more.

Thanks Rob!”

—Ernest Schalansky, IL

“Rob Shore is the real deal. He is an amazing communicator who is showing me how to become the gold standard in wholesaling. His powerful combination of experience, success and passion are so effective at helping you achieve your best. Rob has been an key part of helping me take over a last place territory and moving it to a top performer last month. Rob’s approach will challenge and inspire you. Connect with him today.”

—John Langston, TX

“After my first call on Wholesaler Masterminds I knew I found something priceless. Rob delivers, and uncovers (from the group of seasoned, top notch masterminds in the group) more actionable ideas in a one hour call than I have ever read in a book that takes days to read. Rob’s passion for coaching, and wholesaling is unbelievable, and extremely engaging……….contagious even, no risk of H1N1. I look forward to each session, and the motivation it provides me. One may say it compares to drinking 67.2 bottles of “5 Hour Energy” at once………that’s two weeks worth for those of you who dislike math.”

—Quentin Carter, AL

A Sunday Night Email reader wrote:

I look forward to a number of things every weekend. You are in elite company, albeit an eclectic group. On Saturday, there are click and clack the Tappet brothers and Garrison Keillor. On Sunday, there is Will Shortz, the puzzlemaster and Lynne Rosetto Kasper, The Splendid Table, followed late Sunday afternoon by Rob Shore. Your missives are a good way to end the weekend and engage for the upcoming week. You must be [had been] a helluva wholesaler because you are a good storyteller.”

“I’ve had the unique experience of working for Rob, participating in his Wholesaler Masterminds calls and attending a few of his coaching and training sessions. Over the last ten years that I have known Rob he has always been a great leader, coach and mentor and I owe a great deal of my success to his guidance. In the financial services industry he has worked as a wholesaler, a national sales manager, a high level executive and is now offering his years of experience to firms and individuals who want to take their sales skills to the next level.

In sales long term shelf space is not won by having the product of the month, it is earned by consistently having the best and most memorable sales force on the street. Through his firm shorespeak , Rob not only offers his coaching skills but also all the sales and technology tips and tools to put you head and shoulders above your competition. I highly recommend Rob Shore! ”

—Troy Simmons, AZ

“I have found the Wholesaler Masterminds group and Rob Shore specifically to be a great resource while I build my business in St. Louis. The ability to partner with some of the most successful wholesalers in the country; share ideas, discuss problems, celebrate victories and learn new strategies are but a few of the benefits of this group. Rob has become a mentor, a motivating force and a business coach to each of us in a unique and individual way. I would strongly recommend developing a relationship with Rob as we all need a great coach to be more successful than we imagine ourselves becoming on our own.”

—Dick Miller, MO

“I have had the privilege to tap into the coaching and mentoring resources of Rob Shore. Rob is an accomplished Senior Leader in the distribution of investment products. His vast experience and highly developed leadership competencies enable Rob to be highly effective as a coach within the financial services industry. A critical skill of any leader/coach is the ability to communicate. I have come to appreciate his ability to not only listen, but hear me as well. As a result, Rob always delivers a “tell it to me straight” message. Rob constantly challenges me and the status quo – always seeking to help me become memorable in my own way. Through Rob’s creative coaching approach, I am positioned to continue to differentiate myself which will allow me to stand apart and ahead of my competition. Thank you Rob!”

—Laurie Marksberry, IL

“Rob Shore is a more than a coach; he’s truly an expert on having the skills and approaches that are most important in today’s world. He possesses that unusual skill of being successful both at living the role of consummate salesperson and also of helping others understand how to emulate it. His relationships are deep and long-standing: I explain that as a result of his perfect blend of heart, intellectual rigor and a practical nature. His ability to coach others to his level of success, and beyond, comes from his extensive experience and his special gift for hearing all the possibilities underneath what’s said to him. He has been invaluable to me in my business as a mirror, an idea generator and a great supporter of my accomplishing what I’ve set out to do.”

—Laura Rosenbaum, CA

“Rob Shore has proven solutions that will leverage existing and create new opportunities to build your business. He is a knowledgeable business coach with many years of successful experiences to share.

Rob’s knowledge of the financial services industry is impressive and he is incredibly organized and detailed oriented. He will provide you with ideas that when implemented will build your practice to the pinnacle.

If you’re looking for someone to help you take your company or your sales team to the next level, Rob is the professional with whom you should work.”

—Hugo Ernst, MO

“Rob’s been a leader in the financial services industry for years. But as a coach, he can really help you take your business to a new level. It’s not just about sales skills or best practices. Rob can show you how to build your personal brand, develop a strategy for success, and become truly memorable. And, today more than ever, it’s vitally important to stand out from the crowd.”

—Jeff Osterman, IL

“Over my wholesaling career, I have learned more about memorability from Rob Shore than from every other person I’ve come in contact with, combined. He brings enthusiasm and creativity to the forefront while backing it up with superb blocking and tackling.

Rob’s coaching ability is top notch and has provided me with insight, creativity and honest dialogue all of which have helped drive my effectiveness. He’s instrumental in any success I’ve enjoyed. ”

—Larry Nisenson, NY

“Even coaches need a coach and Rob Shore has been a terrific coach for me. We both have extensive experience in the financial services industry but as my coach Rob has a knack for cutting through the clutter and getting me to focus on the key issues that will help me grow my business; a key trait of a great coach. Rob’s successful track record as a producer, manager and executive in the financial services industry gives him a firm grasp on what it takes to succeed in this industry especially during these challenging economic times. He is also adept at guiding me through the myriad ways of using social media and other technological resources to build my business. We all need an edge in this market and Rob’s coaching gives me that edge.”

—Mark Hoaglin, President, Above The Crowd Business Development Group

“Salespeople, by nature, often like to think they have all the answers. As a member of a group being coached by Rob, I was extremely impressed with his ability to draw out valuable ideas and insights from a diverse group of salespeople and getting us to ‘think outside the box’.

Rob is a very good motivator.”

—Dan Wagner, MA

“Your coaching has inspired me to take the necessary steps to become a leader in my field, and has propelled me to more success than I ever thought possible. Your passion for excellence, and your ability to communicate that passion and to pass it on to others is truly remarkable. The lessons and encouragement I’ve gained from you will help in all my future endeavors!”

—DeeAnne White, London England

“I have had the privilege of knowing Rob for the past 10 years. Rob is one of those rare people in the universe who encompass the passion, energy and talent in the pursuit of making a difference in peoples lives. This occurs not through the tried and true cliches of wholesaling. But rather in a way that inspires all of those he touches to reach within themselves to attain their maximum potential as both people and professionals.

Rob Shore is unique in the industry of financial products distribution. Rob spent a large part of his career calling on financial advisors to help them build their individual practices. This foundation provided Rob with a unique perspective in how to grow top-line sales and bottom-line profitability through all distribution channels. I believe this background was instrumental as Rob led Allstate Financial Distributors to become a leader within all distribution platforms during the past decade.

Rob’s desire to embrace change puts him light-years ahead of countless others in our industry that seek to engage wholesalers in the area of practice management. Rob’s professional experience along with his ability to recognize the necessary core competencies of wholesale distribution are significant in today’s world of intermediary distribution. I recommend Rob to any institution that is looking to grow their distribution company and help financial advisors become more profitable in their individual practices.”

—Seth Friedman, NY

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About Rob Shore

Over 30 years of distribution experience provides the knowledge and granular insights Rob's clients require to assist them with their practices - whether working one on one, in groups, or live events; with senior leaders or frontline wholesalers. [ Read More or Contact Us ]

Our Services > Registered Funds > Mutual Funds > Launching a Mutual Fund

Launching a Mutual Fund

Could a mutual fund product be right for your business.

Launching a ’40 Act mutual fund can significantly expand an adviser’s business while broadening their product solutions footprint. When considering starting a mutual fund, there are many key variables to keep in mind, such as the timeline, structure, costs, marketing, distribution and regulatory requirements. Could launching a mutual fund be the right move for your business? For your benefit, we have outlined below what it takes to launch a successful mutual fund and the fundamental elements involved.

Groundwork | Strategy for Success | Considerations | Steps to Launch | Distribution

Ultimus offers full service support during fund launches

GROUNDWORK FOR LAUNCHING A MUTUAL FUND

Does it fit will launching a mutual fund fit into your business plan.

From distribution opportunities to reduced transaction costs, there are many benefits that advisers can derive from offering one or more of their strategies in mutual funds to grow their product line and assets under management. When an adviser considers expanding their product line by launching a ’40 Act fund, there are questions to help determine if this is the right direction:

• Is there additional demand for business today?
• Are there more channels to sell into? (Ex: Do we have an existing strategy for high net worth clients, but not for our small institutional clients? They may prefer investing in a mutual fund opposed to a private fund.)
• Would offering a mutual fund provide operating efficiencies? Could consolidating many small accounts into one portfolio make it easier to manage?
• Could a mutual fund provide a new revenue stream, helping to diversify revenue sources in an additional channel?

Ultimus provides turnkey solutions to launch a fund

INVESTMENT STRATEGY DELIVERY CHANNELS

CALLING IN THE EXPERTS…

Why is a mutual fund also called a ’40 act fund.

The more familiar term ‘mutual fund’ is a simpler name for the most common type of ’40 Act fund. All such funds operate under the Investment Company Act of 1940 and its associated rules, which were put in place to protect investors.

In a mutual fund structure, investment advisers purchase a portfolio of securities at their discretion while adhering to predetermined investment objectives. Mutual funds offer considerable portability, accessibility, transparency and diversification for investors, which allows for great opportunities to advisers when marketing the fund.

WHO’S GOVERNING?

Mutual fund investment portfolios are managed by separate entities known as investment advisers. Technically, the fund hires the investment adviser to manage its assets. Each investment adviser and mutual fund must be registered with the SEC, and therefore are subject to SEC regulation. Both the adviser and the fund are required to design and implement comprehensive compliance policies and procedures.

The Financial Industry Regulatory Authority (FINRA) also oversees marketing aspects of mutual funds.

In addition, the fund is required to have independent trustees, who are responsible for approving contracts on behalf of shareholders and have continual operational oversight of the fund. While such governance can require effort from all involved, it can also provide an attractive source of comfort for investors who appreciate the protections afforded by the structure.

Read more about how the mutual fund industry has evolved

LOFTY GOALS: DESIGNING A LONG-TERM STRATEGY AND KEY FACTORS FOR MUTUAL FUND SUCCESS

So, “how much does it cost to launch a fund?” As with any new venture, it requires prudent forethought and planning to ensure the best chance of success. Advisers must consider both the initial upfront investment required to start the fund, as well as the potential ongoing financial commitment. Other considerations that should be taken into account are regulatory requirements, resource commitments and the timeline for launching the fund, just to name a few.

“When considering launching a mutual fund, it is key to think about the long-term business plan for the fund. An adviser must have a long range perspective and consider not only the ongoing cost of launching a fund, but ultimately the cost of operating a successful mutual fund.”

– Bob Dorsey, Ultimus Fund Solutions Vice Chairman and Co-Founder”

To learn more about achieving a successful mutual fund launch, read our blog post titled, “Launching a Mutual Fund: Cost of Success.”

EXAMINING FUNDAMENTAL ASPECTS PRIOR TO STARTING A FUND

Which fund structure works for you.

An adviser has two options to consider: series trusts or standalone trusts . A series trust is designed for investment managers who want to start their own mutual funds, but avoid the complexities associated with organizing a standalone trust. In the series trust model, the organizational structure, including its Board of Trustees, is already in place, reducing costs and saving time. The new fund becomes part of a trust with other funds, but each fund is its own separate entity and can maintain its own unique investment strategy and a distinct marketing image. Investment managers can focus on managing money and growing assets while the contracted service providers, such as Ultimus, perform the back-office services.

In comparison, a standalone trust is the preferred option for advisers who want to establish a family of funds and/or have greater involvement in the administrative duties of the fund. There is a more heightened control factor with standalone trusts than in series trusts. Investment managers play a key role in the selection of the initial board of trustees, fund officers, fund counsel, custodian, auditor and administrator. Like a series trust, organization fees are generally paid by the adviser, not the fund.

Both structures are viable options for advisers. One option is not better than the other; it’s simply the structure that best meets the firm’s long-term business goals. To learn more about mutual fund structures, click here .

SERIES TRUST VS. STANDALONE TRUST STRUCTURE

KEY DIFFERENCES	SERIES TRUST	STANDALONE TRUST
	Governed by an established/existing Board of Trustees and Officers, as well as pre-selected Fund Counsel.	Governed by a Board of Trustees and Officers that the client selects.
	4-5 months	6-7 months
	Fees are normally paid by the adviser, not the fund. Likely a lower cost than standalone due to negotiated agreements.	Variable based on service provider selection. Fees are normally paid by the adviser, not the fund.
	Funds/advisers share trust fees with other entities in the trust, taking advantage of scale and efficiencies of the shared structure.	Funds/advisers are solely responsible for the fees associated with the trust.
	A cost effective and time efficient way for advisers looking to launch a mutual fund.	Typically preferred by advisers looking to start a family of funds or wanting involvement in board selection/participation.
	75 days	Variable, no set time
	Yes	Yes

In addition, advisers must consider the different types of open-end and closed-end fund structures.

Learn more about series trusts and standalone fund structures on these dedicated pages or…

AN EYE FOR DETAILS – DIVERSIFICATION AND LIQUIDITY

Based on the 1940 Act and IRS rules, mutual funds must be invested in securities that are diversified and have a high degree of liquidity. Mutual fund regulations limit the ability to concentrate investments in an individual position; which means they don’t work well for strategies that require significant concentration.

Secondly, the mutual fund portfolio must be liquid to provide protection for the investor. Regulations require at least 85% of the fund’s investments be in liquid securities. This ensures that daily redemptions can be made, and offers an extra layer of security for shareholders. It is not uncommon for funds to outline a specific policy regarding investments in illiquid securities, which are sometimes more restrictive than the SEC requirements.

To learn more about the regulations and restrictions of a mutual fund, read our blog post titled, “Launching a Mutual Fund: Compliance & Regulatory Insights.”

LAUNCH SEQUENCE: APPROXIMATE TIMELINE

As mentioned previously, another difference between a series trust and standalone structure is the timeline to launch. While the graphic below is broken down by segmented time, there can be overlap amongst the processes.

For more insight on the starting a mutual fund timeline, click here .

“Advisers must go into the process with a strong understanding of each structure and ultimately make the decision that’s best for their long-term mutual fund plans and business strategy.” -Dave Carson, VP, Director of Client Strategies at Ultimus Fund Solutions

LET’S LOOK AT THE BUDGET: STARTUP COSTS AND FEES

In both a series trust and standalone structure, there are one-time setup fees and ongoing operational fees . Series trusts are typically more cost-effective than a standalone trust due to trust fees being shared across multiple advisers/funds in the trust.

Organizational costs will range based on several factors (strategy, trust structure, service partners, etc.) Additionally, advisers need to consider the due diligence fees for platform access when budgeting for a fund creation.

For more in-depth information, read our blog post Launching a Fund FAQs here or…

ONE-TIME SETUP FEES
Fees paid to Service Provider (ex. Ultimus)	Fund Creation and Trust Organizational Fee (if applicable) – Drafting, filing, etc.. Ultimus legal administration can take the lead in drafting registration statements and trust filings
Outside Counsel	Drafts and/or reviews filings for trust
Filing/Registration	Various CUSIP and ticker charges
Standalone Trust Fees	Seed Audit, Insurance, etc.
Platform Fees	Platform Due Diligence Fees (will vary by intermediary)

ONGOING OPERATIONAL FEES
Management Fees*	The adviser recommends/proposes this fee (subject to board approval)
Operational fees	Fees paid to service providers (administrator, auditor, legal, custody bank, etc..) as well as, state bluesky fees, SEC registration fees, trustee fees, and out of pocket fees (printing, postage, etc…), etc.
12b-1 fees	If applicable – marketing and distribution fee allocated to the fund and included in expense ratio.

*Advisers generally set a management fee and enter into an Expense Limitation Agreement, establishing an expense cap for the fund. When the funds are operating above the expense cap, the adviser is required to waive a portion of their management fee to reduce total expenses to the capped amount. In some cases, particularly with a new, small fund, the adviser may need to reimburse the fund out of pocket to keep fund expenses below the cap.

Learn about what it takes to break even in our insight article, “Breaking Down Breaking Even in Mutual Fund Operations – Why There is No Blanket Answer to the Break Even Question.”

PUTTING THE PIECES TOGETHER: ORGANIZATION STRUCTURE AND ENTITIES INVOLVED

The graphic below demonstrates the various organizational components that service or are a party to a mutual fund. Click each segment for more information.

BEGINNING THE JOURNEY: STEPS TO LAUNCH

Engage, engage, engage…service providers.

It’s important to leverage the experience and expertise of fund service providers early in the fund exploration process. Ultimus educates advisers on the process and assists with required service provider engagements including recommendations for counsel, auditor and others needed. Ultimately, when it comes to organizing and launching funds, we will take the lead, managing the entire fund organizational process, guiding advisers throughout.

PLANNING FOR SUCCESS: PRODUCT DESIGN

Ultimus takes an educational approach to product design, guiding investment advisers through the many considerations that come with choosing the right product, trust and platform. Ultimus takes time to learn your investment strategy, target market, and business goals before creating your registration statement. Some common factors that can affect the construction of your fund are listed below:

• Portfolio design and construction
• Fund expense objectives
• Comparable fund analysis
• Prior performance assessment
• Strategic business plan/goals
• Minimum investment requirements
• Investment management fee analysis
• Share class structure to support distribution strategy
• Shareholder access options (web, telephone, broker/dealer)
• Product structure
• Asset class considerations (small cap vs. large cap)
• Distribution potential/channels/challenges
• Structure: does a mutual fund make sense?

LIMITING THE UNLIMITED: ADVISORY FEES

The advisory fee is the percentage/basis point fee allocated to the fund and paid to the investment adviser for serving in that role. The amount is recommended by the adviser and approved by the board on a contracted annual basis (first contract approval is for 2 years, with one-year renewals thereafter).

Generally, the fee should be within the range of fees of peer or substantially similar funds, a review and process Ultimus will guide the adviser through. The fee is assessed based on the net assets of the fund and subject to waiver based on the fund’s expense cap.

LEVERAGING HISTORY: PRIOR FUND PERFORMANCE

Advisers may be able to employ prior fund performance when launching registered funds. However, a substantial degree of consistency in asset management team, investment strategy and investment securities are all required.

Additionally, the use of prior strategy performance will be limited to the prospectus unless a private fund is reorganized to launch the mutual fund. Both Ultimus and the trust counsel will help assess consistency, as well as provide additional requirements.

SOLD! DISTRIBUTION AND CLASSES

There is no set standard for mutual fund share classes, however most funds conform to the common share class characteristics utilized below. Most commonly, funds will launch with an Institutional share class, as that is widely used across various distribution channels. Rationalizing which share class(s) to launch is a crucial step in developing a distribution strategy. Loaded share classes (those with commissions) have fallen out of favor in recent years and assets in those classes have been dwindling.

For more in-depth counseling on fund share classes, please

SHARE CLASS TYPES

						Investor Use of Class
Share Class	Load	Comments				RIA	BD	Institutional	Retirement	Retail
A Share	Front	Average front end load of 3.75% to 5.25%. 12b-1 of 25 bps.				No	Yes	No	No	Yes
C Share	Level	Typically charge 1.00% up-front with a 1.00% trailing 12b-1. Deferred fee applies.				No	Yes	No	No	Yes
Institutional (INST)	No-Load	Class will not have any 12b-1 fees and generally no shareholder servicing fees. Minimums are typically higher and will range from $100k – $250k.				Yes	Yes	Yes	Yes	No
Investor (INV / ADV)	No-Load	Class will often have a 12b-1 fee (25 bps) and/or Shareholder Service Fee. Minimums are lower.				Yes	Yes	Yes	Yes	Yes
Retirement (R-6)	No-Load	Similar to an INST share class but will not have any additional fees – 12b-1, Shareholder Service Fee, Admin Svc Fee, etc….				No	No	No	Yes	No

GETTING DOWN TO BUSINESS: SEC REGISTRATION

Ultimus knows the art of preparing registration statements. We create ones that are broad enough to be flexible down the road, but also narrow enough so potential investors know how the strategy is going to work. Once completed, we will file the registration statement with the SEC. Towards the end of the second month after filing, the SEC will normally contact Ultimus with questions and comments. After all questions are resolved, the SEC will inform us that the fund is effective.

With our experience, we can help identify, in advance, new structures and strategies that may raise concern from the SEC. We can also help advisers evaluate how important these factors are to business needs and how to present them in the registration statement.

REACHING YOUR AUDIENCE AND GROWING ASSETS

Prior to launching a fund, investment advisers need to develop marketing and distribution strategies that take into consideration their entire business strategy. Mutual funds are a specific delivery channel for an investment strategy; in that way they can be an extension of what you already do. However, because sales and marketing for funds are likely different than what you do today, it is important to develop a complete long-term business plan for fund launch and operation. Here are a few areas to consider.

STORYTELLING TIME: MARKETING STRATEGY

A marketing strategy involves understanding how financial advisers/investors are going to learn about your mutual fund. Developing your plan should include telling your story, creating a pitchbook and designing an online presence. We have strategic business partner relationships in these areas and can point you in the right direction. You can learn more about these mutual fund marketing tactics in an Ultimus blog post , which is included in a three-part series on launching a mutual fund.

Expert panelists shared stories and advice regarding the environment of marketing for mutual funds in our fireside chat, “Real World Marketing: Real World Stories.” Plus, industry thought leader, Bill Hortz, Dean of the Institute for Innovation Development, shared his valuable insights to help advisers create and develop their unique story.

PLAN OF ATTACK: DISTRIBUTION STRATEGY

In addition to a marketing plan, a distribution strategy is essential for growing assets. Making a mutual fund available through various distribution channels to reach groups of investors requires experienced forethought and planning.

Selecting a capable firm to assist with mutual fund distribution efforts can be important. With Ultimus’ consultative and educational approach in this area, we are able to guide advisers through this challenging process. One of our insight articles, Five Critical Questions to Help Identify the Ideal Distribution Partner , highlights how investment advisers can go beyond vendor sales speak to find supportive distribution partners.

“In the mutual fund market, customization is king. Managers shouldn’t rely on an “off the shelf” program or “check box” approach. It’s imperative managers align their distribution efforts with strategic firm goals, and find a fund distribution partner who understands those goals.” -Kevin Guerette, VP, Director of Distribution Strategies

DETERMINING AND SETTING UP A SALES STRUCTURE

In today’s distribution dynamic, there are several key considerations a mutual fund manager must think about before building their sales structure. Structure options include:

• Traditional wholesaling: model deployed by an outside sales force that spends the majority of its time on the road, meeting with prospects and clients on a regular basis.
• Hybrid wholesaling: model allowing sales team to work from an office location for a portion of their time, but also traveling in a concentrated geographic area.
• Internal wholesaling: model driven by a team typically housed on-site at the fund company.
• Virtual wholesaling: model utilizing an electronic method of sales outreach, using a firm’s website as home base for all content.

The route an investment adviser takes in building a sales structure depends on which option best suits their firm and their business goals. For a deeper dive on this topic, we examine those particular structures in this Ultimus Insight article, Wholesale Changes – Key Considerations for Launching Funds and Building a Sales Structure in the New Distribution Dynamic .

DISTRIBUTION PLATFORM PREFERENCES

Planning which platforms to engage and when is an important part of a fund’s distribution strategy. While it may seem ideal to be on as many platforms as possible, a targeted approach and long-term engagement plan, customized to the business goals, is most effective. With Ultimus’ consultative approach, we help you determine which intermediary platforms make sense based on your target audience, timing, platform cost structure and business plan. Having years of experience and connections to leverage, we will walk you through the options and provide seasoned input for your consideration.

We hope this information has been helpful and insightful. To discuss this topic further, we are happy to be a resource and will guide you through the entire process.

If you think that launching a mutual fund will be a beneficial endeavor for your business or investment strategy,

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DISCLOSURE: Information contained on this website is based on public data, historical agreements and dialogue with intermediaries. Such information represents our current understanding of the described platforms and the costs associated with them. In many cases, such costs may be negotiable. All pricing and fee information is subject to change without notice.

8778 UFS 2/18/2022

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