Everybody is an "external" wholesaler these days. Roughly 40 percent of the nation's labor force has been working from home (WFH) during the pandemic, and that includes the thousands of wholesalers and marketers that drive asset growth for mutual fund and ETF sponsors. Internal,
external, or hybrid — they're all remote.
| William H. "Bill" Finnegan|
Managing Director, Financial Services Marketing
How is that working out? The rapid shift to WFH has stressed systems and required a rethinking of how firms are organized, including sales and marketing. It didn't help that it coincided with a 30-percent-plus drop in GDP and a plunge in the stock market — typically periods that require high levels of client touch. Those that had technology in place to support highly personalized client engagement were able to make a more seamless transition. Those that didn't need to reimagine what a future sales and customer engagement world will look like: challenging though the current environment might be, it's a great time to reassess.
Major market dislocations can provide an excellent opportunity to strengthen existing client relationships and develop new ones as money moves around. But you have to be able to reach clients and prospects, and you have to do it how, when, and where they prefer to be contacted.
Client engagement technology is designed to support this with tools that allow for compliant, highly customized outreach and personal communications across multiple platforms. Equally important, these systems are location and device agnostic — they can be deployed both in an office setting and remotely to support WFH.
For those who are now recognizing the utility of these solutions and beginning to consider deployment, there are a few things to keep in mind. The first is fit — how does the technology mesh with the current and anticipated needs of your firm? For some, the answer may be that it doesn't.
Smaller organizations, with a limited range of products, operating in specific markets and geographies, may be fine with more limited systems developed in-house. Larger firms, with broad products lines, serving multiple markets and geographies, will need a platform that can adapt and scale to address the needs of the marketing team supporting these products, all with
a minimum of customization. They should have an understanding of how the vendor plans to evolve the technology platform over the coming years. This, too, should align as closely as possible with the firm's own product plans, organizational structure, and strategic goals.
Of course it's not just the fund marketers and wholesalers who will be working remotely. The clients will be working at home in larger numbers as well, whether they're gatekeepers, financial advisors, or the senior management team. There are more than 300,000 financial advisors out there, according to industry consultant Michael Kitces
. Most are likely to be out of
the office now, and many will remain so at least part of the time in the future. In those circumstances, their support needs may change — how they receive and disseminate data and information for clients, for example. Systems need to be able to manage this within an intuitive
framework that tracks activity and ensures compliance.
The second is integration — how well does the new platform work with your existing technology? The higher the level of customization required, the higher the cost, and those costs will persist well beyond the initial implementation.
A good rule of thumb is that once a customized system, always a customized system (until you rip the whole thing out and start over). This can result in a new line of expense for the firm and place added demands on in-house IT, which is probably already stressed enough.
Sales and marketing are typically the second-most expensive functions in a firm — but the primary
mission and the highest cost resides with asset management. Most IT departments are unlikely to be equally skilled at supporting both. In these circumstances, diverting support from investing to marketing may not represent the best and most efficient use of resources,
especially when there are other options available.
Third is the need to look through the current crisis to a post-pandemic world. The trend towards WFH has been driven by necessity — for now — but in the future, it will be propelled by
convenience and economics. Coming out of the pandemic, it's anticipated that the country will see a changed employment landscape. While many people will return to the office, it's predicted that WFH will continue to account for as much as 20 percent of all work days, up from
around 5 precent prior to the advent of COVID-19.
Already the basic expectations for having access to technology have changed. Going forward, having the ability to work from virtually anywhere will be assumed in higher value-added professions like fund sales and marketing. Access to the technology will impact everything from
client relationships and asset accumulation to wholesaler recruiting.
A knock-on benefit of investing in the systems to address the needs of WFH will be the ability to meet the changing expectations for communication ushered in by millennials and Gen Z, and these should be taken into account when shopping for the technology. Digitally native, younger
wholesalers and marketers looking to develop a younger client base will want a platform that allows them to communicate in the manner to which they're accustomed, i.e able to leverage social media and with content that's less static and more interactive. The money is moving this
way, hundreds of billions of dollars, and technology platforms need to be heading in the same direction.
What started as an on-the-fly effort to adapt to the coronavirus crisis may ultimately provide a bridge to the adoption of more effective tools for managing client engagement. Learning the lessons of WFH, and applying them to the selection of new platform technologies, can help firms become more efficient in the coming age of work-from-anywhere fund sales and
William "Bill" Finnegan is managing director of financial services marketing with Seismic.
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