In Steven Covey’s famous book entitled The 7 Habits of Highly Effective People, the last habit is ‘Sharpen the Saw’. He begins the chapter by telling a story of a man in the woods who is attempting to saw a tree with great effort but making little progress. A passerby suggests taking a break and sharpening the saw blade to which the man replies – ”I don’t have time to sharpen the saw, I’m too busy sawing!” We’re in a similar situation with wholesaling. Wholesalers are working harder than ever but their ability to influence sales has been reduced by a combination of factors including the movement to passive indexing, the migration to model portfolios and the paring-back of preferred lists. From the advisor’s standpoint, there is simply less demand to meet with wholesalers and we’re witnessing this in the form of reduced access at both the advisor and office level. The goal posts have been moved – permanently. The initial response from Asset Managers has been to employ ‘big data’ and re-think traditional channel structures. While understandable, neither address the central issue – the needs of advisors have changed. Advisor’s don’t need ‘product experts’ going forward as much as they need business-savvy ‘consultants’. This requires that wholesalers adapt by developing a broader perspective on a wider range of non-product-specific issues that advisors face and delivering deeper insight on ways to address them. This shift from product focus to practice management will require Asset Managers to re-tool their sales teams and better-sync their training with their value-add platforms. The good news is we’re beginning to see signs that some firms are adapting to this new paradigm but many others are not – they’re simply too busy sawing.
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