NU Online News Service, April 8, 3:55 p.m. – Regional broker-dealers, bank investment program managers and small independent broker-dealers expect wholesaler support to deteriorate this year, according to an informal survey by the Bank Securities Association, Wayne, Pa.
The managers surveyed agree that wholesalers are an important source of support for their reps, but they rate the current level of wholesaling support as only fair, say it got slightly worse in 2001, and predict it will drop even further this year.
Meanwhile, financial services companies are telling BSA they hope to cut distribution costs by reducing the number of wholesalers in the field and slashing wholesaler compensation and travel costs, BSA says.
In the past quarter, at least 10 mutual fund and annuity companies have reduced the number of wholesalers, BSA reports.
Wholesalers with fewer than five years of experience, and those hired between 1999 and 2001 to build new territories, are the most vulnerable, BSA adds.
But BSA says there is one bright spot: life insurers with strong fixed annuity sales have been doing better than the mutual fund companies, and some have actually been hiring wholesalers.