Transforming Sales & Reporting With Analytics

Ed Blodgett Director, Private Client Group, Brandes Investment Partners

Rick LedburyVice President, Data Services, Money Management Institute

Roger Paradiso Managing Director, Chief Investment Officer,Private Portfolio Group, Morgan Stanley Smith Barney

Marilee Ferone Managing Director,

UBS Financial Services

Gene Mulligan Managing Director,

Managed Solutions Group, Merrill Lynch

Jason Ainsworth Managing Director,

Head of Advisor Solutions Group, Neuberger Berman

Participants

Sponsored By

A Supplement to Money Management Executive | Produced by SourceMedia Marketing Solutions Group

The Sales Data Initiative, a collaboration between the Money Management Institute (MMI) and Coates Analytics, a division of Albridge, a BNY Mellon company, creates a comprehensive repository of industry sales data across the broad spectrum of advisory solutions including separately managed accounts, mutual funds, exchange-traded funds, unified managed accounts and rep-driven accounts. Delivered through the Coates Analytics Distribution Management System (DMS), this advanced sales data and reporting tool can help broker-dealers, platform providers and investment managers reduce sales reporting costs, enhance productivity, improve client retention, forge deeper relationships with platform partners and increase the overall usage of fee-based products.

Senior executives from sponsor and investment management firms met recently in New York to discuss how the Sales Data Initiative will transform how they develop and distribute managed solutions.

The following are excerpts from the roundtable:

Bruce Morris, SourceMedia: Rick, can you give us a bit of background on why MMI undertook this initiative?

Rick Ledbury, Money Management Institute: Today, broker-dealers and investment managers typically expend lots of internal resources to collect and analyze their own sales data and subscribe to multiple outside services to survey the competitive landscape. Working with our member firms, we identified an opportunity to create an authoritative single-source of industry sales data along with advanced analytical tools to mine that data. By giving our members access to analytics and business intelligence not available through current industry data sources, we can help them make smart business decisions and drive increased use of advisory solutions.

Tell us a little bit about the Coates Analytics Distribution Management System (DMS).

Ledbury: DMS is a password protected web-based sales data and reporting system that collects and aggregates data from broker-dealers and delivers it to subscriber firms. It’s very easy to use and really reduces the need for resource-intensive efforts by sponsors and investment managers to gather and analyze advisory solutions sales data. DMS has been available for a number of years, and, although it’s a powerful product, MMI will leverage its relationships with sponsors to help Coates Analytics grow the number of broker-dealers that contribute to the data, making the available data set broader and deeper.

Bruce Morris EVP and Managing Director, Professional Services and Technology Groups SourceMedia

Moderator

A SourceMedia Thought-Leadership Roundtable

As broker-dealers, what are some of the ways you currently use DMS sales data and analytical tools to grow assets and expand your business?

Marilee Ferone, UBS Financial Services: We’ve used DMS for several years and are glad that MMI is teaming up with Coates Analytics. This initiative benefits everyone in the advisory industry. Our asset management partners can be more responsive to spon-sors and branch management teams. It’s an efficient way to identify opportunities and deepens the relationships between sponsors and partners. Wholesaling becomes more intelligent.

Roger Paradiso, Morgan Stanley Smith Barney: We use the data to get and give information that’s relevant for our internal and asset management partners. We want our partners to understand where their investment manag-ers are currently used and could potentially be an attractive fit. Before using DMS, we lacked good data. Using the data we now have available, we can target appropriate branches and advisors. That’s the key for this, the big advantage.

Gene Mulligan, Merrill Lynch: The sales data helps us align resources with our investment partners, but we also use DMS in two other ways: to focus on where we want to drive business and as a risk mitiga-tion tool. If we know that a fund has been downgraded, we know which advisors to target with our communications.

On the asset manager side, how are you using DMS sales data currently?

Ed Blodgett, Brandes Investment Partners: We use the data in four key areas: territory management, product management, marketing and sales strategy, and evaluating personnel effectiveness. The very granular branch and product level data allows us to assess oppor-tunity sets based on the precise products and platforms we participate in and to strategically design our sales territories. Prior to introduc-ing a specialized product, we analyze data by platform, sales trends and format to determine the most effective targets and campaign. We also use the data to set goals and assess the productivity of our sales people.

Jason Ainsworth, Neuberger Berman: We em-ploy the data in a variety of ways to retain and grow assets. When an investment research team at a broker-dealer changes its strategy, we can feed that information to our wholesal-ers so they can spend time understanding the changes. We also provide the data to our sales and marketing team to use when it creates new sales materials or podcasts. The Coates Analytics tool helps them target the branches to receive electronic communica-tions. We’ve had a lot of success. If a branch uses one of our solutions, they’re likely to look at another one. So it’s allowed us to be more targeted and feed information back to the advisors doing multiple products with our firm.

Blodgett: One of our challenges is that we have a relatively small sales force and limited resources. The Coates Analytics data helps us direct where we want to spend those resources to get the maximum effect—being able to direct those resources to targets where they’re apt to be the most successful is very important to us.

Has productivity improved?

Paradiso: Consistency of data from a single source is always extremely important for containing costs, eliminating redundant efforts and keeping things on track. We’ve seen a lot of productivity from being able to share this kind of data with our sales team.

Ferone: We’ve designed reports to use not only with our asset management partners but also with the branch management teams. When we receive our themes from our investment portfolio strategy group, we meet with our asset management partners and let them know where they are today and where the opportunities are. Branch management then works with the asset management sales professionals to drive the themes. It sounds simple, but it took us a while to get there. We started with Coates Analytics sales data for mutual funds, and we’re now looking at alternatives and unified managed accounts as part of a compre-hensive strategy to drive the best portfolio construction in the advisory industry.

Mulligan: We have a consistent place to get sales data. Since Coates Analytics will ag-gregate and report the data, we don’t have to spend internal system resources. Instead of trying to push data out, we can now spend that time working with our investment managers as partners. It lowers costs and gives us a better view of the entire industry.

“Having complete intelligence from all sponsor firms we do business with will make it even easier to set territory alignments and target new products.”

— Jason Ainsworth, Managing Director, Head of Advisor Solutions Group Neuberger Berman

“ It’s an efficient way to identify opportunities and deepens the relationships between sponsors and partners.”

— Marilee Ferone, Managing Director UBS Financial Services

How about from the asset manager side, any productivity gains?

Ainsworth: We’ve been a Coates Analytics client for quite a few years and absolutely have improved productivity. We’ve grown our sales force and have been placed on more platforms. We target key account home offices through research. If we create a new product, we can identify the programs that have gaps and share our product with those firms to help with their overall platform presentation. Perhaps our product will provide diversification to an existing asset base or an existing roster. It allows us to do the correct asset allocation work for each of the sponsor firms.

Blodgett: I agree that DMS is a terrific engage-ment tool on the national accounts level. Rather than talking about your product in isola-tion, you can instead look holistically at where your offerings fit and talk to an analyst about overall portfolio construction and trends.

The data allows our wholesalers to have far more engaging conversations with our spon-sors’ sales managers. Without this data, it’s a shallow conversation. We can discuss what the sales manager’s territory looks like compared to other territories and firms, and whether or not they are achieving their goals on each platform right down to the branch level. We can then discuss how our firm can participate in their initiatives.

There are also productivity gains in reporting to our wholesalers. In the past, you were only able to compare one wholesaler to another. Now you can compare your data to industry trends and opportunity sets and do product or platform analysis. This is far more meaningful for wholesaler self-assessments. The greatest productivity enhancer is when wholesalers manipulate this tool for themselves.

Ainsworth: We challenge the wholesalers to work hard, but we also want them to work smart and they get very smart with this tool.

What are the chief advantages you see coming out of the Sales Data Initiative?

Mulligan: The two big benefits from a broker-dealer point of view are lower costs and a better view of the entire industry.

Ferone: There are benefits from everybody’s perspective. For example, it will make our asset management partners more responsive and productive vis-à-vis our branch management teams. With our themes in hand from our investment portfolio strategy group and after reviewing with our branch management and complex management teams, we will be able to meet with our asset manager partners and say, “Here’s where you are, here’s where you want to be, and here are the opportunities.” It’s just a more efficient way for everybody to operate.

Paradiso: Productivity and efficiency. Right now, you’re using resources from different sides of the same firm to collect the same data for different uses. The initiative creates a single source everyone can tap into, and you won’t need people spending time trying to figure out how to get the data.

Blodgett: The initiative is important because it will encourage more sponsors to contribute sales data and develop a richer database that gives us an even broader view of product and platform trends. We’ll be able to see what’s going on at the branches and in the territories and on specific platforms and products across a wide number of sponsors.

Ainsworth: A couple of years ago, Merrill Lynch gave us a list of advisors they wanted us to target to transition to a particular platform. Advisors don’t want to see a hundred wholesalers with a hundred different investment opportunities. They want to see a focused list. Coates Analytics created a report that showed the branch opportunities as red light, green light and yellow light so we could be more efficient with our sales efforts. The collaboration between MMI and Coates Analytics will help us continue to deliver that type of targeted product placement service.

Ledbury: The Sales Data Initiative provides MMI members with deeper resources and one-stop shopping for data. The new data will supplement the MMI Central quarterly report and annual Industry Guide to Managed Invest-ment Solutions produced by Dover Financial Research, providing more granular, frequent and actionable information for both investment managers and sponsors.

Will broader data access enable new product creation?

Blodgett: DMS allows investment manag-ers to see the gaps in their offerings. For example, there’s been a dramatic growth in multi-asset class vehicles. The Coates Analytics sales data can help managers assess opportunities, understand sponsor initiatives and determine what role they can play in promoting those initiatives.

“Right now, you’re using resources…to collect the same data for different uses. The initiative creates a single source everyone can tap into...”

— Roger Paradiso, Managing Director, Chief Investment Officer, Private Portfolio Group Morgan Stanley Smith Barney

“ As a broker-dealer, we can control which subscribers have access to the data. That control mechanism is important.”

— Gene Mulligan, Managing Director, Managed Solutions Group Merrill Lynch

CONTINUED ON BACk

Ainsworth: As an asset manager, it’s challenging to evaluate and benchmark our success with wholesalers across different geographies. Today, we’re using DMS sales data to create opportunity sets across sponsor platforms and to look beyond our traditional large-cap asset classes and grow assets in satellite-oriented products. For example, we’re hearing from sponsors that boomers are searching for retirement income. DMS allows us to analyze new retirement income type vehicles or asset classes and maybe even new platforms to address clients’ retirement income needs. Having complete intelligence from all spon-sor firms we do business with will make it even easier to set territory alignments and target new products.

Is there any concern about sharing propri-etary information?

Mulligan: As a broker-dealer, we can control which subscribers have access to the data. That control mechanism is important.

Ferone: From my perspective, there are not many reasons for concern. Why wouldn’t we all jump on this? It deepens relationships among sponsors and partners. It makes for better, more intelligent wholesaling and financial advisor conversations, driving better portfolios across all the advisory platforms.

Ainsworth: Sales data has been publically available for many years without adverse effects. Better data will enable advisors to become more productive in bringing in new clients and helping their clients manage their wealth more effectively.

Blodgett: We don’t have concerns about sharing data either. More information just helps grow the industry.

Are enhancements planned for DMS?

Ledbury: Besides adding more sponsors to make the data broader and deeper, Coates Analytics is adding Branch Briefing Books to deliver a branch snapshot to mobile devices such as iPads at the firm, branch and product

levels. Another exciting enhancement is linking sales and asset data to various performance and other quality measures with Lipper Lead-ers Scorecard ratings to provide sponsors and investment managers with insights on how products are used and to help iden-tify systemic risks and opportunities. We’re also creating a new benchmarking tool for broker-dealers that allows them to gauge their advisors’ behaviors against the broad industry while maintaining the anonymity of their data.

Paradiso: That’s terrific. Getting data is too clumsy at this stage. We can usually find the information we need, but the challenge is the number of places you have to go and how long it takes. I want data on the fly. I want to step into a branch, look at my tablet and under-stand that branch. There’s an opportunity to allow data to truly be at everyone’s fingertips.

Any closing thoughts?

Blodgett: We’re bombarded with products and services that claim to pay for themselves by reducing costs and improving productivity. Coates Analytics sales data is one of the rare instances where those claims are validated. It helps us provide better reporting to our sales and marketing people and helps our national accounts people do their jobs more effectively. It helps us be a better firm for financial advisors, clients and the sponsors that we work with.

Ferone: I fully support the MMI initiative. Everyone will be aligned and consistent. The repository will be familiar and it’s easy to use. It’s a fantastic way to gain efficiency, consis-tency and insight for both sponsor firms and their investment partners.

Ainsworth: There is a huge need in our industry for both asset managers and sponsor firms to have access to consolidated data. The Sales Data Initiative will help all of us communicate and work together to grow the industry. The initiative will make us all better at what we do.

Mulligan: That’s right. It’s about the advisors and their clients and being able to deliver the best overall offering. I think this initiative is a win-win and will help us grow the market for advisory solutions. n

“ Prior to introducing a specialized product, we analyze data by platform, sales trends and format to determine the most effective targets and campaign.”

— Ed Blodgett, Director, Private Client Group Brandes Investment Partners

“MMI will leverage its relationships with sponsors to help Coates Analytics grow the number of broker-dealers that contribute to the data, making the available data set broader and deeper.”

— Rick Ledbury, Vice President, Data Services Money Management Institute

Coates Analytics, a division of Albridge Solutions, Inc. Albridge Solutions is an affiliate of Pershing LLC. Pershing LLC, member FINRA, NYSE, SIPC, is a subsidiary of The Bank of New York Mellon Corporation.