Legg Mason, Pioneer Investments and Virtus Investment Partners are likely to begin hiring wholesalers in 2012, after most asset managers kept the lid on retail sales expansion last year, and more firms are expected to join. These efforts are indication of the firms’ efforts to tap into the growing retail space at a time when revenues are under pressure but differentiation is seen as key to gathering assets.

Seventy-five percent of asset management firms responding to a recent Cerulli Associates survey said they will add to their external sales teams in 2012. Fifty-eight percent said they will increase their number of internal wholesalers, and 56% said they will boost their hybrid wholesaling forces, Cerulli reported.

“We’re all trying to grow and expand our resources to tap into the clear trend that the retail business will be growing faster than the institutional business over the next 10 years,” noted Joe Sullivan, head of global distribution at Legg Mason. “We’re doing it at a time when we see revenue compression due to the enthusiasm and proliferation of the passive space and pressure from distribution partners to receive a greater share of fees from fund sales.”

Sullivan said the firm will grow its cross-channel and internal wholesaling teams this year. Legg Mason revamped its distribution structure last July by implementing a cross-channel function that is similar to the traditional hybrid role but with notable differences. The firm’s 16 cross-channel wholesalers are covering markets outside the major metropolitan centers, Sullivan explained. They spend about 25% of their time in the field, compared to 50% for the traditional hybrid. Unlike traditional hybrids, they have their own books of business and are compensated at the same rate as externals for motivation, he added. Also last year, Legg Mason reduced the number of externals to 48 from 52 and lopped off four territories. It reduced its internal sales force to 24 from 35. However, it carved out a separate team to handle administration functions, freeing up the internals to support the external sales team 100% of the time, Sullivan explained.

Joseph Kringdon, head of U.S. retail sales and marketing at Pioneer, said the firm will boost its external and internal sales teams by approximately 25% each this year to 50 externals and 35 internals focused on the wirehouse and independent broker-dealer channels. In addition, it recently hired three hybrids and plans to add one internal dedicated to the registered investment advisor channel, which requires more targeted and focused technical coverage, he said.

The firm’s wholesaling headcount has been flat since 2008, but its gross sales increased each of these years, he reported. Pioneer had gross sales of $11.2 billion in 2011. “We feel we’re at the limits of our productivity. To get more productivity, we need to shrink territories. Smaller territories give the wholesaler the ability to dig into more developmental opportunities.”

Virtus last year increased its external and internal wholesaling teams by close to 50% each to 25 externals and 17 internals, said Jeffrey Cerutti, executive v.p. and head of retail distribution. The firm created an independent broker-dealer and RIA channel in the fourth quarter and dedicated six externals and three internals to it. The move has paid off. Sales are up across the board, but sales in the independent broker/dealer and RIA channel increased by 15% more than the increase in sales in the wirehouse channel, Cerutti reported.

If this trend continues, Virtus will hire more wholesalers to the channel in 2012, Cerutti said. The firm grappled with whether to increase the number of externals and reduce the size of their territories and decided on the latter because anecdotal evidence suggested externals would continue to focus on the major wirehouses, regardless of territory size, he explained.

















Legg Mason, Pioneer Investments and Virtus Investment Partners are likely to begin hiring wholesalers in 2012, after most asset managers kept the lid on retail sales expansion last year, and more firms are expected to join. These efforts are indication of the firms’ efforts to tap into the growing retail space at a time when revenues are under pressure but differentiation is seen as key to gathering assets.



Seventy-five percent of asset management firms responding to a recent Cerulli Associates survey said they will add to their external sales teams in 2012. Fifty-eight percent said they will increase their number of internal wholesalers, and 56% said they will boost their hybrid wholesaling forces, Cerulli reported.



“We’re all trying to grow and expand our resources to tap into the clear trend that the retail business will be growing faster than the institutional business over the next 10 years,” noted Joe Sullivan, head of global distribution at Legg Mason. “We’re doing it at a time when we see revenue compression due to the enthusiasm and proliferation of the passive space and pressure from distribution partners to receive a greater share of fees from fund sales.”



Sullivan said the firm will grow its cross-channel and internal wholesaling teams this year. Legg Mason revamped its distribution structure last July by implementing a cross-channel function that is similar to the traditional hybrid role but with notable differences. The firm’s 16 cross-channel wholesalers are covering markets outside the major metropolitan centers, Sullivan explained. They spend about 25% of their time in the field, compared to 50% for the traditional hybrid. Unlike traditional hybrids, they have their own books of business and are compensated at the same rate as externals for motivation, he added. Also last year, Legg Mason reduced the number of externals to 48 from 52 and lopped off four territories. It reduced its internal sales force to 24 from 35. However, it carved out a separate team to handle administration functions, freeing up the internals to support the external sales team 100% of the time, Sullivan explained.



Joseph Kringdon, head of U.S. retail sales and marketing at Pioneer, said the firm will boost its external and internal sales teams by approximately 25% each this year to 50 externals and 35 internals focused on the wirehouse and independent broker-dealer channels. In addition, it recently hired three hybrids and plans to add one internal dedicated to the registered investment advisor channel, which requires more targeted and focused technical coverage, he said.



The firm’s wholesaling headcount has been flat since 2008, but its gross sales increased each of these years, he reported. Pioneer had gross sales of $11.2 billion in 2011. “We feel we’re at the limits of our productivity. To get more productivity, we need to shrink territories. Smaller territories give the wholesaler the ability to dig into more developmental opportunities.”



Virtus last year increased its external and internal wholesaling teams by close to 50% each to 25 externals and 17 internals, said Jeffrey Cerutti, executive v.p. and head of retail distribution. The firm created an independent broker-dealer and RIA channel in the fourth quarter and dedicated six externals and three internals to it. The move has paid off. Sales are up across the board, but sales in the independent broker/dealer and RIA channel increased by 15% more than the increase in sales in the wirehouse channel, Cerutti reported.



If this trend continues, Virtus will hire more wholesalers to the channel in 2012, Cerutti said. The firm grappled with whether to increase the number of externals and reduce the size of their territories and decided on the latter because anecdotal evidence suggested externals would continue to focus on the major wirehouses, regardless of territory size, he explained.--Cathy Scott




Legg Mason, Pioneer Investments and Virtus Investment Partners are likely to begin hiring wholesalers in 2012, after most asset managers kept the lid on retail sales expansion last year, and more firms are expected to join. These efforts are indication of the firms’ efforts to tap into the growing retail space at a time when revenues are under pressure but differentiation is seen as key to gathering assets.



Seventy-five percent of asset management firms responding to a recent Cerulli Associates survey said they will add to their external sales teams in 2012. Fifty-eight percent said they will increase their number of internal wholesalers, and 56% said they will boost their hybrid wholesaling forces, Cerulli reported.



“We’re all trying to grow and expand our resources to tap into the clear trend that the retail business will be growing faster than the institutional business over the next 10 years,” noted Joe Sullivan, head of global distribution at Legg Mason. “We’re doing it at a time when we see revenue compression due to the enthusiasm and proliferation of the passive space and pressure from distribution partners to receive a greater share of fees from fund sales.”



Sullivan said the firm will grow its cross-channel and internal wholesaling teams this year. Legg Mason revamped its distribution structure last July by implementing a cross-channel function that is similar to the traditional hybrid role but with notable differences. The firm’s 16 cross-channel wholesalers are covering markets outside the major metropolitan centers, Sullivan explained. They spend about 25% of their time in the field, compared to 50% for the traditional hybrid. Unlike traditional hybrids, they have their own books of business and are compensated at the same rate as externals for motivation, he added. Also last year, Legg Mason reduced the number of externals to 48 from 52 and lopped off four territories. It reduced its internal sales force to 24 from 35. However, it carved out a separate team to handle administration functions, freeing up the internals to support the external sales team 100% of the time, Sullivan explained.



Joseph Kringdon, head of U.S. retail sales and marketing at Pioneer, said the firm will boost its external and internal sales teams by approximately 25% each this year to 50 externals and 35 internals focused on the wirehouse and independent broker-dealer channels. In addition, it recently hired three hybrids and plans to add one internal dedicated to the registered investment advisor channel, which requires more targeted and focused technical coverage, he said.



The firm’s wholesaling headcount has been flat since 2008, but its gross sales increased each of these years, he reported. Pioneer had gross sales of $11.2 billion in 2011. “We feel we’re at the limits of our productivity. To get more productivity, we need to shrink territories. Smaller territories give the wholesaler the ability to dig into more developmental opportunities.”



Virtus last year increased its external and internal wholesaling teams by close to 50% each to 25 externals and 17 internals, said Jeffrey Cerutti, executive v.p. and head of retail distribution. The firm created an independent broker-dealer and RIA channel in the fourth quarter and dedicated six externals and three internals to it. The move has paid off. Sales are up across the board, but sales in the independent broker/dealer and RIA channel increased by 15% more than the increase in sales in the wirehouse channel, Cerutti reported.



If this trend continues, Virtus will hire more wholesalers to the channel in 2012, Cerutti said. The firm grappled with whether to increase the number of externals and reduce the size of their territories and decided on the latter because anecdotal evidence suggested externals would continue to focus on the major wirehouses, regardless of territory size, he explained.--Cathy Scott