This week, a NAPA-Net reader poses an intriguing question: “How often do you meet with DCIO and recordkeeper wholesalers?”
A recent NAPA-Net article by Rebecca Hourihan carried the compelling title, “‘We Don’t Meet with Wholesalers’ But Here’s Why You Should,” highlighting those benefits, including the reality that those wholesalers meet with thousands of advisors per year, and they not only see – but have access to – some pretty cool stuff.
One need look no further than current list of NAPA’s Top DC Wholesalers (the “wingmen”) to find a pretty compelling list of experts and expertise.
Well, just under half (47%) of this week’s respondents say they meet with more than 15 wholesalers in the course of a year, while another third (31%) meet with 10-15, and the rest with 5-10.
As for the criteria in setting those meetings, readers noted (more than one response was allowed):
89% - which firm they represent
84% - personal relationship with the wholesaler
79% - schedule availability
42% - compelling ask from wholesaler
“If I am looking for something specifically and think they can assist, or if I am considering them for new business,” noted one reader. “Current or prospective use of platforms or products they represent,” commented another. “How much business we have with them,” explained another. Or as one reader said, “I like them, I trust them, I respect their knowledge of my business, they can offer me unique insight.”
As for whether that has changed in the past two years – for this week’s respondents, not really. About three-fourths of this week’s respondents were in that category, with about 1 in 10 saying it had changed – because their practice had changed, and half that number saying that the reason for change was that the wholesaler(s) had changed. The rest were in something of an “other” category, with the change being more personal than practice. “I don't see as many as i have an internal analyst who also meets with them so i am more selective,” explained one reader. “Not really, but our team has grown, so I've shifted many of those meetings to other team members,” said another.
Support ‘Holes’?
Looking to the support they got (or wanted to get) from their wholesalers, readers cited:
89% - product insights
84% - market Intel
68% - marketing materials
63% - client support
42% - prospect introductions
However, “Prospect introductions are very rare, and for the amount of business we do, I find this a major lack,” explained one reader. “They all want our business, but rarely give us referrals.” Readers did, however, also cite education materials, insights on industry trends, and manager commentary as an important insight from DCIOs “especially when a fund is on watch.”
“$$ for events, ideas,” commented one respondent. “Practice management is key for me right now so having an objective opinion I respect is helpful,” explained another.
Resource ‘Full’?
In terms of ranking these resources, client support topped the list, with more than 4 in 10 (44%) noting it as “absolutely essential” and another 28% classifying it as “appreciated more often than not.”
Product insights, cited as “absolutely essential” by 37%, wasn’t far behind, with another 21% placing it in the “appreciated more often than not” category. Prospect introductions, if not often provided (per the above response) were cited as “absolutely essential” by just 24%, with another 17% in the “appreciated” column. Market intel (21% absolutely essential, 32% appreciated) and marketing materials (16% absolutely essential, 42% appreciated) rounded out the list. Though, as one reader noted, “I wish there were more of those prospect introductions!” Another indicated, “I really do more events because I am getting money. It is very helpful.”
Yet another noted, “I don’t need more ‘stuff,’ it's the relationship with individuals that I value.”
In fact, two-thirds (68%) of this week’s respondents said there are wholesalers they refuse to meet with and another 26% indicated that while they don’t exactly “refuse” to meet, they do try to avoid them. “If I know I won’t be using their firm (i.e., TPAs) because I’m already happy with the ones I’m using,” explained one, going on to note: “one wholesaler has been very rude and condescending, so my office will never meet with her again. If they represent a fund family that only has one fund passing our criteria, I’d rather not spend my time.”
“Some wholesalers are associated with firms that do not meet our criteria for service,” explained another. Explaining their avoidance, another said, “If they are a time-waster, or if they bash the competition, they are of no value to me.” One reader noted “Not interested in their product because it’s either too expensive or just not appealing to my clients,” while another indicated, “They don't understand our position in the market. I try to give everyone at least one quick phone call.” One reader spoke for a number of others in saying there was “only so much time to run my practice.”
“They reach out far too often,” explained one reader. “The biggest negative, though, is when I respond to an email saying I’m not available, I almost always get an immediate follow-up asking for the next possible date. Very irritating! This has made me generally start ignoring and not respond to their emails because I feel like they're harassing me.”
“It’s impossible to do your job and form a close connection with everyone,” said another. “My circle tends to evolve with turnover and time, but I let in those I enjoy (personally) and those whose opinions I value.”
‘Stop’ Shop
We also asked what, if anything, wholesalers try to do for them that readers would “just as soon they didn’t. Here’s a sampling:
- Offer to give us resources that we already pay for ourselves, e.g., investment reporting, fee benchmarking reports.
- Maybe want to meet “too” often and not having something “new” to share.
- Send me unwanted marketing materials.
- Push target-date funds.
- Push product.
- Offer to run proposals too early.
- I don’t need market updates, analyses, and predictions from wholesalers.
- Hard copy leave-behinds.
Other Comments
As for other comments on the subject, readers had a lot to say. Here are some of them:
- “We typically meet with the wholesalers and DCIO reps. that we already do business with and intend on continuing to do business with.”
- “I make time to meet with a wholesaler roughly once every other week in between all my other client meetings, employee meetings, etc. If I take the time to respond with a ‘Thank you, but I can’t,’ then I really wish they would leave me alone for several months before trying back again.”
- “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.”
- “Product wholesalers whom I wish would completely go away are those who market managed accounts. This adds another level of complexity and cost to retirement plans that plan sponsors and participants already see as too complicated and expensive.”
- “I work with wholesalers that deliver on their promises. Some have terrific tools we can use to further engage our clients to bring value add. If they don't have funds that are low cost andconsistent performers, we will typically avoid meeting with them.”
- “They are wonderfully important and mandatory in my view of a relationship.”
Thanks to everyone who participated in this week’s NAPA-Net Reader Poll!
