From the March 2008 issue of Boomer Market Advisor • Subscribe!

Leverage your wholesalers' expertise

People in all walks of life have relationships that are crucial to their success but not necessarily enjoyable. It's an unfortunate fact of business life. Financial advisors know this fact all too well, and yet, that doesn't have to be the case -- in at least one aspect of their life.

Wholesalers are part of every advisor's business. Some advisors view them with respect, as the people who make their life easier, while others see them as the key to building up their supply of giveaway items with fancy logos. Advisors who agree with the latter probably haven't found one that benefits their business. Great wholesalers are out there, and they are prepared to help advisors build a business they can be proud of. They offer advice that goes way beyond product knowledge. How can you find one that will help you build your business, and what should you look for?

Beyond products

The best advisors want to develop long-term relationships with their clients. Doing so leads to a true financial partnership instead of a transactional affiliation. The best wholesalers want the same thing. They want to become partners with their advisors and will do what they can to help advisors help their clients.

"Developing a relationship is key," says John Marshall, the No. 1 wholesaler and vice president at AIG SunAmerica Retirement Markets Inc. "Advisors have to find wholesalers that are focused on helping clients succeed."

Steve Luckenbach agrees. "If it's going to be successful, it's truly going to be a partnership. That allows you to serve more people and impact more lives," says the Cincinnati-based regional vice president of Jackson National Life Distribution.

Financial professionals who view wholesalers as a necessary evil are missing out on the advice, techniques, systems and expertise wholesalers bring to the relationship. Sure, wholesalers want advisors to put clients' money in their products, but they realize that advisors who struggle to run their practices won't be successful for long. It's not all about variable annuities or mutual funds.

"Products come and go," says Matt Newman, Washington's Crossing, Pa.-based regional vice president of ING Americas. "True value is something we bring regardless of products."

Two things distinguish Newman's advisor lunches from others: little to no product talk, and Newman doesn't make himself the whole show. He brings in body language experts, psychologists, economists, succession planners and even etiquette experts.

"These are the kind of events that people can take something away from," Newman says. "We cover things that don't have anything to do with variable annuities but have to do with all parts of their business. These are things they likely wouldn't seek out themselves. It allows me to be an extension of their business."

Newman's goal -- and the goal of any top-level wholesaler -- is to improve advisors' businesses as a whole, not just their abilities as salespeople. Newman wants them to be better listeners and communicators; he wants them to be able to look at their business with an outsider's perspective.

"They've got to be able to run a successful practice," he says.

At one level, wholesalers become an accountability coach, helping advisors stick to their improvement plans or their new systems. Marshall says he asks his advisors what they think they need to work on this month, quarter or year, and then--if they want him to--he will follow up with them to see how things are going.

"We really are the advisor's advisor," Luckenbach says. "Advisors are on an island. The wholesaler comes in and says, 'Let me help keep you on track.' For the same reasons that a client needs an advisor, the advisor needs a wholesaler."

Best practices

Advisors can really let wholesalers' experience go to waste if they aren't willing to have a wholesaler analyze their practice. Financial professionals who find success do so by spending lots of time with clients, discovering and meeting their needs. Sometimes they spend all of their time with clients and forget about the business itself. That's where wholesalers can offer a goldmine of advice.

"Some people are afraid to have someone tell them they're doing something wrong," Newman says. "They ask, 'How can you tell me what to do?' Well, I see 3,000 businesses a year. A successful advisor seeks out someone to tell them where their deficiencies are."

Top wholesalers work with top advisors every day, and they see what makes the top professionals successful. They make note of what Joe in New York is doing or what Tom in California does, and they use that information to help other clients.

"I'm calling on three to five guys a day," Marshall says. "I can bring in things from other businesses, the best practices implemented by other advisors."

Luckenbach tells his advisors that together they are both better. And since Luckenbach brings the experience he has with thousands of other professionals, everyone's combined experience makes everyone better.

"As the years accrue," he says, "so do the ideas."

Marshall points to one example of how he helped a client move to a recurring revenue model of business. He sat down with the advisor and they put together a retention process (one of the many processes top wholesalers are sure to have ideas about). It started with quarterly phone calls and birthday cards and has moved to more elaborate modes of contact. But the ultimate goal is to let clients know how much they are appreciated. Earth shaking? No. But an advisor on his own island may not have the wherewithal to start something like that on his own. With a system or process in place, however, he is able to conduct his business and keep clients happy and in place.

Why not?

So with all of the experience and ideas top wholesalers can offer, why do so many advisors take their wholesaler relationships for granted?

"It's difficult for some people to give up their independence," Luckenbach says. "They consider it weak to have dependence on someone else. [What they don't realize] is that interdependence is the way to success."
Marshall agrees with Luckenbach. The two men also agree that the age-old 80/20 rule plays a part in why some advisors don't invest enough in their wholesaler relationships--and vice versa. If the rule holds true, only 20 percent of advisors are in the business to truly serve clients; the rest are there to make a sale. And, conversely, the same percentages apply to wholesalers. With so many advisors not expecting long-term relationships with clients, it stands to reason that they are not looking for anything long term from a wholesaler, yet they don't want to be viewed as superfluous.

"The same people who don't want to be treated as a commodity," Luckenbach says of the 80 percent, "treat others like it."

It is vital, then, that advisors with a wish to serve and not sell--the 20 percent minority--seek out the minority of wholesalers with the same mentality. Good wholesalers interview advisors to find out if they are a good fit. Advisors should do the same; interview the wholesaler to make sure he is as committed to helping consumers as the advisor. Every advisor is sure to have his own set of characteristics he looks for in a partner, which is likely to coincide with the characteristics he thinks clients look for in him.

Advisors don't have to make a go of it on their own. They have relationships with other financial professionals that can be leveraged to an advisor's distinct advantage. Every advisor knows several wholesalers. The key is to find that one wholesaler who views your business as his business and does everything he can to make both businesses stronger. Does the wholesaler bring fresh ideas and business best practices, or does he bring logoed golf balls and an invitation to a sales pitch disguised as dinner? Find the former, get rid of the latter and find success.

Marshall says it even more succinctly. Advisors should be wary of the answer to this question when thinking about their wholesaler: "Am I glad he stopped by, or did I tolerate it?"

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