Hiring Inst'l Sales? Tips to Attract Top Distribution Staff
May 18, 2018 | Fundfire
Asset managers fighting for premiere sales and marketing talent must demonstrate stability, a desirable culture, and a commitment to new products that realistically reflects the institutional sales cycle.
How asset managers position themselves in a volatile market has a major impact on recruiting, particularly for high growth firms, says Kathy Freeman Godfrey, president of executive search firm Kathy Freeman Company. As such, asset managers must be attuned to prospective employees’ priorities, she shares.
"Corporate culture is huge in indicating stability," Godfrey says. In fact, when she begins working with a client, she always asks about turnover on the leadership team, as well as within their specific business unit.
To this point, collaboration and collegiality are also factors to check for within an organization, she adds, to assess how inclusive the conversation to build the business is, whether across asset classes, sales and investment teams, or otherwise.
Among Millennials, those born roughly between the early 1980s and 2000, a lack of diversity in the financial services industry, coupled with negative perceptions of Wall Street and the lure of the tech industry, has already proven to be a barrier for luring the next generation of talent to asset management, a recent survey by Kathy Freeman Company found, after polling nearly 300 professionals primarily in client-facing roles.
Business Leadership & Direction
Sales professionals are also tuned into the more personal aspects of their job, another source shares.
While factors, such as the strength of an asset manager’s product lineup, its salability, and organizational resources behind it, are obvious priorities for sales people – ultimately, "people get hired by other people," says Mike McLaughlin, partner at Naissance.
Distribution professionals want to know who they are going to be working with, if they are there "for the long haul," and if they are "tethered to that person," should they leave, McLaughlin says.
When new senior leaders, such as heads of distribution or chief marketing officers, are brought in, their primary instinct is usually to "do something big," he continues. Whether that includes shifting the product focus or changing the roles, or coverage area, of sales professionals within the organization – new leadership is typically "looking to put a stamp on the organization," which could work for or against newcomers, McLaughlin says.
Regarding firm stability, recruiters are separately apt to track whether an asset manager’s brand is thriving – and if there is momentum for continued growth, Godfrey notes.
Details such as the manager’s capacity for growth and whether the business is diversified are top of mind, and, generally, whether a firm can get specific about their growth efforts, she says.
Budget: The Bottom Line
An asset manager’s financial commitment to a sales professional’s business line, including how long they expect to support the product, is also a key interest for prospective talent.
Firms must be prepared to articulate how invested they are in a new product or asset class pegged for growth, according to Godfrey.
To this point, sales professionals "need to be convinced of the firm’s understanding of that market and the time it takes to make that germinate," says Margot DeMore, co-founder and managing partner at executive search firm Broad Street Consulting Group.
And this can be demonstrated through compensation agreements, she says.
"They are looking for more than the traditional one-year guarantee… specifically when someone is trying to be a part of a growth story," DeMore says, adding that professionals may opt for a two-year compensation contract. These compensation guarantees typically include base salary, plus incentives, she explains.
"Compensation is a huge [factor]. If you’re a smaller emerging manager, your distribution folks are probably going to be paid [largely] in commissions and that makes sense. If you’re a larger firm, the trend is towards base and bonus to promote collaboration," Vande Water adds.