How Distribution Teams Look to Data to Boost Sales Efforts

As asset management firms compete for assets in a primarily virtual environment, data can help distribution teams increase productivity by identifying the next best opportunities, but system integration and data sourcing remain challenges for many firms, according to a new report by Cerulli. 

When distribution executives were asked what the top objectives for their data analytics efforts over the next two years are, analyzing the profitability of advisor relationships (45%), identifying the best prospects for wholesaler engagement (42%), and measuring the impact of both wholesaling and digital marketing efforts (30%) were cited as the top priorities. 

A majority (58%) of asset managers also indicated that they plan to increase data analyst headcount by 2024. According to Cerulli, the average data analyst headcount at firms that staff the role is expected to increase from four to six. Developing such data intelligence capabilities, however, requires implementing the proper data systems, sourcing data inputs and appropriately deploying resources, according to "The Cerulli Report—U.S. Intermediary Distribution 2021: Leveraging Data to Navigate Change."

In fact, 74% of wholesalers feel that prospecting in a digital environment is more difficult. The resumption of in-person meetings will help alleviate this, but prospecting will likely only get harder as more advisors choose to outsource portfolio construction, consolidation shrinks the number of addressable points of influence, and advisor communication preferences evolve, Cerulli notes. This, the report says, is in addition to growing expectations that home offices will place greater restrictions on wholesaler access to advisors. 

Overcoming Challenges

And while more than a quarter (27%) of distribution executives consider identifying the best advisor prospects for digital engagement a top priority, most (55%) indicate they are faced with overcoming challenges such as insufficient technology infrastructure and data sourcing (35%). 

On the infrastructure side, this includes challenges with the CRM, sales reporting systems, marketing tools and the general ability to share data between groups, the report explains. Moreover, sourcing data internally often requires costly investments in this infrastructure, and even when systems have been updated to facilitate entering information, wholesalers can be resistant to using new tools, Cerulli further emphasizes.  

Consequently, outdated or incomplete client data is one of the most common stumbling blocks data executives see relative to asset managers’ data analytics efforts, the report notes. To mitigate these challenges, Cerulli recommends that distribution teams understand the importance of information management as distribution teams increasingly consume more data. 

“Identifying and deciding how to organize the location of internal data sources is a crucial early step for teams looking to use data,” notes Ed Louis, Associate Director of Wealth Management at Cerulli. “The ability to repeatably reduce the time it would normally take for wholesalers to uncover opportunities or guide them toward opportunities that might have otherwise been missed entirely requires the implementation of proper infrastructure, as well as a team dedicated to translating data into actionable insights.” 

The research observes that managers with $500 billion or more in AUM are more likely to have advanced data analytic capabilities to fuel distribution efforts than their peers. Firms of this size have the capital on hand to hire more professionals dedicated to data efforts, acquire data inputs and increase systems functionality, the report notes. 

Meanwhile, in qualitative research interviews with Cerulli, data executives note how frequently distribution teams walk away from data initiatives altogether when implementation efforts fail to generate an instant jump in sales. 

“The reality is that successfully leveraging data and digital engagement is an iterative process that requires a willingness to experiment and evolve,” says Louis.

“When harnessed appropriately, data can help distribution teams increase productivity by identifying the next best actions and opportunities that should be prioritized. By evaluating their use of data, asset managers can become more efficient, more targeted and ultimately more effective.”