Data scientists - digital data - mutal fund

Do You Know Who’s Taking You to the Dance?

Omnibus sub accounting , which makes the puzzle of which advisors are recommending and redeeming a company’s fund shares at best challenging and at worst entirely overwhelming has been known to bring seasoned sales and marketing managers “to their knees” in frustration. One veteran distribution exec reports that he literally “started pulling out his hair” trying to crack the omnibus account puzzle; another reported “omnibus account nightmares.”

Seasoned sales executives generally recognize that among all the clients who do business with their firm, a subset of their total roster of customers almost always represents a disproportionate amount of total business. In wholesaling circles, Pareto’s Principle is often interpreted and applied by directing wholesalers to concentrate their efforts, to the exclusion of all others, on their “top 100.” The 80%/20% rule sometimes proves out when data is analyzed, but more often than not, “who’s taking you to the dance” is more complicated than intuition or Pareto would suggest.

In a recent analysis, a fast-growing mutual fund distributor learned that the bottom 40% of advisors who had placed a trade in the past 12 months (in descending rank order of production) represented just 11% of total inflows for the year.
Particularly in the asset management business, when, for some mutual fund companies intermediary customers can be counted in the thousands (hundreds, on a territory by territory basis), analyzing data and considering sales trends is the only fact-based approach to matching up and aligning sales and marketing resources to effectively exploit the highest potential sources of business going forward.

If you’re not certain about who’s taking your firm to the dance, we have some ideas about how you can gain the critical insights you need to optimize your firm’s distribution effectiveness.