Executive Summary: The asset management industry is changing significantly, driven by shifting investor preferences, technological advancements, and regulatory developments. As a result, the role of asset management wholesalers is evolving from a purely sales-driven function to one focused on providing value-added advisory support to financial advisors. In this whitepaper, we will explore the key drivers of this transformation and the new tools and services wholesalers are using to differentiate their offerings and better serve their clients, including efficient portfolio construction, portfolio risk analytics, model management, and ESG screening.
Traditional asset management wholesalers have primarily focused on selling investment products to financial advisors. However, as the industry evolves, wholesalers increasingly adopt a more consultative and value-added approach. This change is driven by several factors, including the rise of passive investing, increased demand for customization, and the growing importance of environmental, social, and governance (ESG) factors.
Drivers of Change in Asset Management Wholesaling.
Shifting Investor Preferences: The rise of passive investing and low-cost index funds has pressured active managers to demonstrate their value, leading wholesalers to focus on providing tailored solutions and expertise rather than simply pushing products.
Technological Advancements: Adopting new technologies, such as data analytics and digital tools, has created new opportunities for wholesalers to deliver value-added services and deepen their relationships with financial advisors.
Regulatory Developments: Regulatory changes, including fiduciary standards and fee transparency requirements, have increased the demand for advisory support from financial advisors, further driving the transformation of wholesalers’ roles.
Efficient Portfolio Construction: Wholesalers increasingly leverage technology and data analytics to provide financial advisors with optimized portfolios that meet clients’ risk tolerance, return objectives, and investment preferences.
By helping advisors construct more efficient portfolios, wholesalers can enhance their value proposition and differentiate themselves from competitors.
Portfolio Risk Analytics
Wholesalers also offer portfolio risk analytics services to help financial advisors identify, measure, and manage risks within their clients’ portfolios.
By providing detailed risk assessments and scenario analyses, wholesalers can help advisors make more informed investment decisions and better manage their clients’ risk exposure.
Model Management
As the demand for personalized investment solutions grows, wholesalers increasingly provide model management services to help financial advisors create, maintain, and customize investment models for their clients.
These services can save advisors time and resources while enabling them to deliver tailored solutions that meet clients’ needs.
ESG Screening
With the growing importance of ESG factors in investment decision-making, wholesalers are increasingly offering ESG screening and integration services to help financial advisors incorporate sustainability considerations into their clients’ portfolios.
By providing access to ESG data and analysis, as well as guidance on best practices for ESG integration, wholesalers can further differentiate their offerings and meet the evolving needs of their clients.
The role of asset management wholesalers is changing from a sales-driven function to one focused on providing value-added advisory support to financial advisors. By offering tools and services such as efficient portfolio construction, portfolio risk analytics, model management, and ESG screening, wholesalers can differentiate their offerings, deepen their relationships with advisors, and better serve their clients in a rapidly changing industry landscape. This transformation will require wholesalers to adapt their skill sets, embrace technology, and develop new expertise to remain competitive and meet financial advisors’ and clients’ evolving needs.