By Fiona Maciver
Given the shorter-term market volatility and longer-term disruptions to the distribution landscape, asset managers’ sales and account management teams have to work extremely hard to deliver their firms’ frontline support for distributors. Demonstrating a clear understanding of distributors’ business needs is becoming a basic requirement for building successful relationships and providing the service levels desired by professional fund buyers.
BlackRock takes the sales & account management crown while Nordea storms up the rankings.
Fund buyers highlight information provision as the biggest potential area for improvement from asset managers’ sales teams.
Interest rates and inflationary issues trend up in selectors’ key drivers of industry change.
The crème de la crème
Having claimed pole position in the Fund Buyer Focus sales and account management rankings in both 2014 and 2015, JP Morgan has been overtaken by its nearest rival, BlackRock, this year (see table). Pictet continued its forward momentum from last year, climbing another two places. But it was Robeco, the Dutch manager, that made the biggest move of the leading groups, improving four places to secure a place at the top table itself. Outside the top 10, Nordea took a massive 14-place leap up the rankings to 15th position.
The dynamics behind the moves
Firstly, a note on the metrics used. As part of its rolling interview programme, Fund Buyer Focus asks distributors to measure their preferred providers for sales and account management competencies against eight attributes, and the resulting attribute scores are then weighted and summed. These attributes are as follows:
▪ Accessibility and responsiveness
▪ Frequency of contact and visits
▪ Pro-active information provision
▪ Quality of contact and visits
▪ Sales-staff expertise
▪ Scope of information provided
▪ Support for sales force
▪ Understanding clients’ business needs
Over the period, there were some changes in the impact rankings (representing the relative importance of each attribute) with the understanding of clients’ business needs nudging marginally ahead of sales-staff expertise. It comes as no surprise to also see the frequency of contact and visits increase in relative importance too as distributors seek more information and reassurance from fund providers in challenging market conditions.
What has been driving the positions of each group? JP Morgan has set the benchmark in recent years for sales and account management, impressing selectors with the quality of support via both face-to-face interactions and remote information provision. While still revered for its abilities in this business area, the company has lost ground to its nearest rival – BlackRock. BlackRock edged ahead by marginally outscoring JP Morgan in understanding business needs. Digging further into fund buyers’ perceived strengths of each group reveals that BlackRock is also seen to be slightly stronger for information provision while JP Morgan is just ahead on sales-staff expertise. These are slim differences but it is necessary to also question the role of product offering in the evaluation of sales and account management. BlackRock’s comprehensive active and passive offerings clearly give it an advantage, allowing it to reach out to a broader range of distributors with products for almost all occasions.
Positive moves further down the table were enjoyed by Pictet, Deutsche (pre share-price wobbles in September) and Robeco. Robeco scored well across all attributes. Its particular perceived strengths in the eyes of selectors are understanding clients’ business needs and the quality of contact. – strengths that are reflected in the qualitative feedback from this Belgium/Luxembourgbased fund buyer:
‘I like the fact that instead of pushing whatever products it happens to be promoting at the time, Robeco’s sales team focuses on understanding our particular needs, and tailors its product proposals to us accordingly. I think that this, broadly speaking, is its main strength.’
Outside the top 10, Nordea’s recent sales success has been underpinned by increased recognition for the quality of its account management, which has seen it hurtle up the sales and account management rankings. Of course, having a blockbuster product to sell, its Stable Return Fund (albeit now soft closed), helps to get a foot in the door but fund selectors are clearly impressed with the level of support that they receive. This firm’s perceived strengths include accessibility and responsiveness, information provision and quality of contact – attributes that clearly resonate with this Spanish discretionary portfolio manager:
‘Nordea’s sales people are very accessible for us, with a good speed of response to information requests. Furthermore, the information that they supply to us stands out for the level of detail provided.’
With the sheer numbers of incumbent and new product providers generating fierce competition, and regulatory and technological disruptors thrown into the mix too, the demands on sales teams’ time and skill sets are weighty. Asset managers need to demonstrate a good fit with distributors’ business models. Reviewing the qualitative comments from fund selectors (a selection of which can be seen in the feedback box above), it is clear that many distributors are tired of the continued product push by some asset managers and, in some cases, the lack of knowledge of the sales person pitching up at their office. They want a more rounded approach to relationship management where the sales person has good technical knowledge of the general market environment, their own products, and how they might answer the needs of distributors. Product relevance and knowledge are key to success.
The most recent data from Fund Buyer Focus confirm this, highlighting the top-two areas for improvement needs in sales and account management to be information provision and understanding clients’ business needs. Clearly there is a dependency on the latter to achieve the most appropriate level of information provision and also an opportunity for sales teams to feedback to their colleagues what works, what doesn’t and ideas for future products and services. Supplying the perfect level of information is a balancing act and increasingly requires not only a bespoke approach to each distribution channel but also to individual firms. Information provision covers a broad spectrum of requirements including relevance, timing, knowledge and expertise, frequency, and format. Successful delivery requires collaboration across functions from back office to the frontline. With it so difficult to stand out in such a highly competitive marketplace, there is a real opportunity for fund managers to distinguish their brand through strong relationship management with distributors and investors – the human factor can make all the difference.