Asset Managers Seek More Efficient Distrib Strategies

While many expansion plans have been put on hold, distribution executives are considering alternatives to maintain adviser coverage, according to a new report from kasina.

Due to the current market climate and a pessimistic outlook for 2009, asset management firms are seeking low-cost, high-efficiency distribution strategies, according to a report by kasina. One in four asset managers expects to reduce head count within sales and national accounts by more than 20 percent for 2009, the New York-based advisory firm says.

While many expansion plans have been put on hold, distribution executives are considering alternatives to maintain adviser coverage. Over the next year 50 percent of asset managers aim to add internal wholesalers and 42 percent are seeking to expand their hybrid wholesaling teams.

In a November survey of 12 national sales managers from a broad range of asset management companies (representing more than $1 trillion in AUM), kasina found that five firms (42 percent) have already reduced the size of the external wholesaling teams. In four of the five cases, the reductions have exceeded 15 percent. This contrasts with the results of kasina's October survey, in which only 16 percent of firms planned or had already executed cuts.

"When you combine the revenue hit firms are facing with the significant expense associated with traditional sales models, these actions are inevitable," Lee Kowarski, principal at kasina, said in a release. "But with this pain comes opportunity, and we think that the efficiency of hybrid models and an enhanced emphasis on national accounts can help firms position themselves for long-term success."

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio