"Some advisors are adamant about using a systematic process for managing their clients' finances but fail to take the same systematic approach when it comes time to sell their businesses."

Support Network

By John Bowen

We've long talked about investment products becoming fully commoditized—largely interchangeable. If any of you are still wondering when this will occur, wonder no more: It has already happened. Investment companies, by and large, offer excellent products and programs, but there is usually little to distinguish one from another. I've seen financial advisors grow disillusioned because it is getting harder to choose the best partners for their businesses.

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The obvious alternative, of course, is not to judge an investment company solely on its products and programs, but also on what it can offer to help grow your practice. Again, I've seen advisors become disillusioned as they try to choose the best business-development partners. All too often, investment companies say they're doing more to help advisors grow their businesses, when in actuality they are just paying lip service to the idea.

These are tough words, I know, but they need to be said. Financial advisors depend on institutional partners to help them build great businesses so they can serve their clients well. But with few exceptions, firms continue to focus on their products (which are commodities, anyway) and provide scant effective business-development support. The key word here is effective. Plenty of firms share business-building concepts and strategies with advisors, but few follow through with support that will ensure advisors incorporate these ideas into their businesses.

Fortunately, though, there are exceptions—companies that provide excellent products and programs and true development assistance. One of the most important potential supporters of an advisor's business is the wholesaler.

Admittedly, advisors' overall experience with wholesalers has not been good. Often, after meeting with a wholesaler, advisors are left feeling they could have used their time more effectively doing almost anything else.

But there are great wholesalers out there who will grow with you and help build the business you always wanted. Working with top wholesalers can mean hundreds of thousands or even millions of dollars of additional income.

To find these wholesalers, you need to investigate every one of your wholesaler relationships and then only work with "A" players. Spend your precious time only with those wholesalers who can add real value to your business and contribute directly to your success.

Bare-Bones Support

At a minimum, wholesalers should provide support in three major areas:

• Marketing and sales support focused on training or turnkey processes that help you build your business by attracting affluent investors;
• Practice-management support that brings you the ideas and best practices of other financial advisors; and
• Technical support for both their own products and issues you face in delivering services to your clients.

The Next Level

To add value above this minimum level, wholesalers you choose to work with must:

Have product knowledge. You already expect them to bring you new product information. More important, you should expect to receive all product information—anything that's happening within their company—so you're never surprised. Understand what it means to be a financial advisor. Better yet, wholesalers will have been advisors at one time so they can relate to the challenges facing you.

Understand the investment process. The most successful advisors use a consultative approach, not one that's focused on product sales. If wholesalers are focused only on selling products and not on working with you to see where their product offerings fit into your overall investment-consulting process, you shouldn't be working with them.

Know how to market to the affluent client. Wholesalers should understand the challenges of managing wealth in order to give you specific advice that will help you grow your business.

Have knowledge beyond their own products. Wholesalers should be able to give you competitive analyses to show you how their products stack up, not only against similar products, but also against other investment vehicles.

Ask for More

There are world-class wholesalers out there who can deliver service and expertise at a higher level. This is what you should expect these wholesalers to do for you:

Provide sales ideas. Great wholesalers systematically collect the best sales ideas of top advisors and are ready to share them. Expect these wholesalers to bring fresh sales ideas whenever they meet with you. In addition, financial institutions constantly create sales aids for their wholesalers to deliver to advisors. Ask for them along with comprehensive business-building information.

Offer insights into selected markets. Financial institutions have access to a range of research on various markets, including (and most importantly) the affluent. They distribute this market research to advisors through their wholesalers. The best institutions are taking that research and translating it into actionable strategies to help advisors market their services. The best wholesalers should provide you with all of these.

Provide leading-edge technical information. Affluent clients are looking for you to provide expertise in highly technical areas of wealth management and preservation. Given the speed with which these areas change, keeping up is a tall order. Expect wholesalers to help you stay on the cutting edge. For complex issues, the wholesaler is likely to introduce the basic information to you and the institution will provide more detail as needed. The best wholesalers will show you how to use that information to generate new business.

Deliver practice-management support. Many institutions are equipping their wholesalers with tools to help advisors run more efficient and profitable businesses. At a minimum, expect time-management strategies that help you focus your efforts on revenue-producing activities. From the best wholesalers, expect help with building transferable equity in your practice.

Be a personal coach. Wholesalers should be able to work with you on the complete range of business issues and deliver the appropriate value-added services you need. Building a coaching relationship with your wholesalers positions you to take full advantage of their substantial expertise.

Chose the Best

By knowing what to expect, you'll be in the driver's seat when it comes to choosing a wholesaler to work with (and not the other way around). However, you still need a mechanism to filter the top-notch wholesalers out from the rest of the crowd.

To accomplish this, many of the larger elite advisory firms appoint a staff member as liaison between their product sponsors' wholesalers and the advisory firm. They recognize the time it takes to filter out those product sponsors and wholesalers who deliver little or no value. Many of these elite firms have gone on to build significant strategic alliances with their product sponsors. But it all started when they built strong relationships with great wholesalers.

While you may not have the same resources as the larger firms, you do have the same desire to serve your clients and grow your business. Leverage your growth by appointing yourself or a member of your staff as wholesaler liaison. Set aside one-hour blocks of time to meet with wholesalers to determine which ones can actually add value to your practice.

To make the best possible decision, use an interview guide (see sample below). Ask all wholesalers how they will provide the three basic types of support, as well as how they will provide value beyond that. Ask specifically about additional services that would be of use to you, such as assistance in designing your workshops or providing affluent clients with expertise on complex technical issues. Only when you are satisfied that a wholesaler operates at a level that can support your business should you invest any of your precious time.

Sample Wholesaler Interview Guide

1. Please describe your level of product knowledge, not only of your company's products, but of your competitors' products.

2. Have you ever been a financial adviser? How will your previous experience help you meet the challenges that I face?

3. How can you help me improve my investment consulting process while using your investment products?

4. My practice is focused on working with a particular target market. To what extent can you and your firm provide me with insights into this market?

5. What specific, actionable information can you provide that will help me grow my business more effectively?

6. Please share with me some of the best sales ideas of the top advisers you work with and how those might be applicable to my practice.

7. What tools do you offer-such as well-designed workshops or seminars-that have been particularly effective in working with affluent clients?

8. To what extent can you provide support in leading-edge, highly technical areas of wealth management to assist me in serving my affluent clients?

9. Do you or does someone in your company provide additional practice management support to help me run my business more efficiently and profitably?

10. To what extent can you be my personal coach to help me effectively incorporate new concepts and strategies into my practice?