天美传媒

As consultants to our WalletShare clients, we often get asked about what firms are doing well in terms of mutual fund distribution. The first step to answering this question is to identify managers who are succeeding. This past quarter, we looked at managers who gained significant sales market share over the last twelve months vs the prior twelve months, and where they made these gains.

Most successful firms achieved significant market share by driving outsized sales in just a few key products. It鈥檚 easy to chalk this up to a hot-performing product that 鈥渟ells itself鈥� or 鈥渂eing in the right place at the right time.鈥� But this belies the effort and skill required to position this product for sales when performance or industry tailwinds shift in its favor.

In fact, when we looked closer at attributing sales success at these firms, they were generally doing at least one of three things well. These three tactics are: focusing on just one or two distribution partners, the use of AI and data, and developing their value in the RIA market.

1. Focusing on key distribution partners

Several successful managers had significant gains within one or two distributors. The takeaway is not to identify one distributor and point all resources toward them, but rather to cultivate a shorter list of key partners and to pivot resources to partners where there is suddenly a product or service opportunity.

Indeed, asset managers want to become more focused, and in our 2024 survey of national accounts teams, firm/platform prioritization was ranked within the firms鈥� top five initiatives 70% of the time. This was the most frequently cited response. However, our research has also shown that the number of 鈥渇ocus firms鈥� has ticked steadily higher since 2020. Part of this is due to covering enterprise RIAs and RIA aggregators, but also to sales efforts on broader product offerings, including SMAs, ETFs and alternatives. To keep appropriate service levels (both at the home office and advisor levels) to capitalize on product tailwinds, asset managers should focus on fewer distribution partners that are most aligned with their own offerings.

2. Using AI and data to better target advisors and prepare for those meetings
   
   Using AI to better prep the sales team for advisor interactions is already starting to make a difference in terms of sales. Of course, quality product is a prerequisite to building market share, but being able to efficiently capitalize on shifting advisor needs and product opportunities is challenging without the aid of data management and AI. The asset managers who have translated this meeting preparation into market share do not necessarily do it with the most sophisticated technological wonders. Instead, they have quickly implemented interfaces for their sales team that simplify answers to their most common questions about advisors.
   
   Our "AI is Solving Distribution鈥檚 Pain Points Today" whitepaper notes that 80% of business intelligence teams are in the experimentation and exploration phase of using AI. On the one hand, it is great to see the widespread excitement about AI solutions. But on the other hand, too many firms are getting stuck in this phase and not pushing toward an operational model that provides value to the sales team.
   
   
3. Developing value for the RIA market
   
   The final area we identified as a contributing factor to asset managers鈥� success is their expansion into the RIA market. This may be because of success in products other than mutual funds, but also because of their mutual fund growth in the channel. Partnering with RIAs in these cases revolved around offering a specific value that the asset manager had honed.
   
   Again, success is impossible without strong products, but to accelerate attention to their products, asset managers are building inroads through services that are tangential to the products. This is particularly important as the trend toward aggregators/consolidators grips the market. The engagement success we鈥檝e seen to date comes down to the support of these aggregators to increase client service efficiencies, offer differentiated wealth management and streamline succession within their constituent firms. This includes providing an outsourced solution for parts of the investment process, enhancing the client experience (tax management and front-end interfaces) and providing access to more exclusive areas of capital markets.
   
   Success here is often not about creating new capabilities to deliver to RIAs, but rather directing existing expertise to the RIA market in a way that solves their specific needs.

While this was a point-in-time analysis of successful mutual fund managers, these three factors will continue to be important as asset managers juggle more investment wrappers. We expect new drivers of success each quarter, as asset managers further hone distribution to their unique strengths. The 天美传媒 Distribution Solutions team is ready to help in these discussions about distributor prioritization, implementation of AI solutions and refining approaches to the RIA market.