John Hancock Investments
is harnessing the power of Big Data.
In previous stories, MFWire
reported that Hancock CEO Andrew Arnott is open to more fund adoptions
and that his firm is making headway gathering assets in core equities.
These are not the only initiatives that Arnott has busied himself with in the past months. Another important effort is the development of a team called the Business Intelligence Group, or B.I.G. for short.
According to Arnott, the goal of the team is to "take homogenous streams of data and find correlations and opportunities to sell more funds."
Hancock has added six people to this unit so far, including a data expert who was modeling disaster scenarios for nuclear power plants. Arnott described these data experts, who come from both the asset management and big data worlds, as "people who can take the data, smash it on the ground and find new opportunities."
Arnott described the importance of the initiative in this way:
What you will see from us is a greater use of data to find new sales opportunities.
Fund distribution has evolved into a much more consultative role. The days of a wholesaler taking a financial advisor out for a steak and then the advisor buying an average product are just gone. Much of the product passes through the hands of independent consultants who decide which products should be deemed recommended. The role of the wholesaler has become less about trying to just purely selling something and has become more of a balance between selling and supporting.
Probably seven out of every ten dollars that goes through the intermediary channel is somehow touching a professional buyer.
What you will see going forward, is that there will be a lot more science applied to sales. People using data in a much more meaningful way to capture customers.
The stakes are serious for Arnott, who estimated that there are some 235,000 financial advisors who sell funds in the United States. Out of that number, he estimates roughly 67,000 do business with Hancock.
"Our challenge is to figure out how to get more of the folks who do business with us to do more business, say instead of buying just one fund, buying more," he said.
Hancock is taking a few pages from credit card companies and online retailers, which have used predictive analytics algorithms ("49% of the people who bought this product also bought this,…") to guide consumer purchases as well as sales strategies.
To bolster its data-gathering, Hancock is building up its presence in a number of online venues, including Linkedin
"Linkedin is like plumbing. If you link in with advisors, now you have the plumbing. With the right tools, you have access to information that the advisors have on their pages. Through that intelligence, we can direct our sales staff to the meet the needs of these potential clients," he said.
Hancock is not the only Boston firm big on data. Eaton Vance
has also embraced the concept, with marketing czar Bob Cunha
delivering a speech on the on the subject during a NICSA conference last year
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