, senior managing director and head of institutional sales at Hancock Funds
says he is realigning his distribution team to better reflect the changing realities of the mutual fund market – in particular how the channels in the market are evolving.
“We are realigning our resources to meet the changing demands of retail and institutional clients,” he recently told MFWire
He said is institutional team is roughly 35 people. “Over the past three years, we have invested heavily in the growth of this team. The institutional team includes DCIO, the consulting channel, bank trust, RIA and broker dealer platform,” he said.
He added that his firm also has “a broad retail team focused on the wirehouses, planners and banks.” This team is roughly 80 people.
Casselr explained that “the DCIO channel represents a tremendous amount of assets and it is an area that is growing. As an organization, we are very focused on that segment of the market. It represents a tremendous opportunity for growth for the firm.”
All of these changes are occurring because the evolving market conditions. He described this evolution in this way.
The market is starting to blur as it relates to retail and institutional. There seems to be a changing dynamic. There are many different forces at work in this marketplace. Institutional consultants are moving down market into the retail channel. RIAs and Retirement Advisors are moving up market.
Cassler says that “what used to be clear lines of delineation between retail and institutional have now become shades of grey.”
He said that segmentation can also be found at the platform level:
1. Open architecture -- these are the record keeping platforms where your funds need to be available for sale
2. Platforms that build recommended lists
3. The hybrids between the two
“’How do we best deploy our distribution resources to drive sales?’ is the question firms are struggling with today,” he says. “As a result, firms are starting to think about customer engagement differently.”
Because of that blurring of the channels, Cassler says that “RIAs, financial advisors, and other entities that were historically considered retail are now asking for institutional resources. They want access to reporting packages, institutional commentary and portfolio managers.”
In response, he says, firms are starting to realign their sales and distribution teams. For example, some firms have aligned their DCIO and BD Gatekeeper teams under institutional, The reason, he says, they want to leverage the resources already available to long-standing institutional clients.
“It is becoming less about how the firm is registered, and more about who are the firm’s end clients and how do they need to be serviced,” he says. “You can't differentiate your services based on how a firm is registered. They all want the same materials. Their clients are going to expect that.”
Cassler says that segmentation is an important part of the distribution discussion. “Segmentation will dictate how you organize your clients and deploy your distribution resources. Cross channel coordination is very important with regards to segmentation.”
For example, he added, “within the DCIO channel, we segment the advisors into two groups.”
“Our DCIO specialists are responsible for working with those advisors that do the majority of their business in the retirement space. The next group is the advisors who do a combination of retirement and traditional wealth management business. For this segment our DCIO specialist partner with our retail wholesalers,” he says.
Moreover, “for those retirement platforms that have a research department or are building recommended lists, we will engage them like an institutional customer. We will offer them the same products and services as our institutional clients.”
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