Investment managers are committing more sales and marketing resources to RIAs and the Defined Contribution Investment Only market, according to new data from kasina, a provider of market analytics to the financial services market.
A study of 30 asset management firms with average assets under management of $135.3 billion shows 64 percent of firms have a sales force dedicated to calling on RIAs, up from 47 percent last year.
The average firm had a sales force of 132 people.
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Specialists targeting the RIA and DCIO market each represent 3 percent of sales forces, on average, the smallest percentage of committed sales people.
But those numbers are poised to grow, according to kasina.
Average external salesperson gross for the DCIO market increased $50 million in 2015 to $404.6 million. Specialists in the RIA market are expected to gross $451.7 million in 2015, up $14 million from last year.
Those specialized sales roles are yielding more in compensation for those fortunate enough to be benefiting from the trend. RIA sales team members averaged $390,000 in compensation in 2015, up about $40,000, while DCIO specialists averaged $317,000, up nearly $25,000.
If all that isn't enough to convince how much more interested fund companies are in RIA and 401(k) business, kasina research also shows those specialized sales forces averaged the largest increases in travel and entertainment expenses.
Fund companies spent about $75,000 for their DICO sales specialists to travel to and entertain prospects.
Those investments are paying off. Top salespeople to RIAs are grossing $15,000 in sales for every $1 invested in expense. DICO specialists gross a similar proportion.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
