Regulation  

News Analysis: Sales strategies switch gears

Fund managers are reshuffling their sales departments as the rise of the ‘centralised investment proposition’ continues to change the game in 2014.

Centralised investment propositions are offered by firms such as wealth managers, discretionary managers and investment consulting firms. They enable mass-market financial intermediaries to outsource their clients’ investment portfolios to specialist investment management companies, who use structures such as multi-asset funds and model portfolios to run in a cost-efficient way.

Meanwhile many nationwide financial advice companies and networks have established their own central investment panels to carry out investment research and export their findings to the firms’ thousands of client-facing advisers.

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The end result is that fund selections are more frequently being made by centralised research teams whose decisions affect an increasingly large number of client portfolios.

While a large number of advisers, even tiny village firms, have decided to continue to carry out investment selection themselves, the rise of the centralised proposition is causing managers to refine their sales attack postures. Some of them have been reducing their regional salesforces and focusing on relationships with centralised teams.

Ben Gutteridge, head of fund research at Brewin Dolphin, said he was seeing more firms splitting up their sales teams, with one group focusing on wealth managers and platforms and others focusing on advisers.

Mr Gutteridge said asset managers do seem to be making more of a “conscious effort” now to speak to research teams and said there are “more dedicated sales people that we’re dealing with”.

Paul Surguy, head of managed funds at Sanlam Private Investments, said that he had noticed more of a focus from asset managers on getting on panels and buy lists, though he said it may only be “at the margins” of the industry at the moment. He said: “I do hear sales teams talking about getting on ‘panels’ more and more.” However, the evolution in the sales blend could pose a threat to intermediaries.

The increased focus on panels could lead to a decreased adviser-facing presence from asset managers, something that Frank McGarry, head of business development at Psigma Investment Management, said seems to be more of a trend at the moment.

JPMorgan Asset Management (JPMAM) last year reshuffled its sales team by bringing in Andy Larkin from Neptune to head up a brand new unit dedicated to getting JPMAM’s funds on the ‘buy lists’ of networks and wealth managers.

Mr Larkin’s team has been created to be separate from Mike Parsons’ field sales team, which will concentrate on maintaining relationships at the individual regional office level. Jasper Berens, head of UK funds at JPMAM, said the restructure was in response to the RDR, which he said had caused “significant change” in the fund distribution and fund selection market.

Mr Berens suggested the move would benefit clients – with each segment of its client bank now having a dedicated team.