What Advisers Look for in Wholesalers

The relationship between financial advisers and distribution partners is evolving, with advisers concentrating more assets among a smaller group of wholesalers. Fuse Research Network’s Advisor Trend Monitor report, “Wholesalers: The Advisor View,” estimated that 45% of advisers’ client assets were invested with their three largest distribution partners, up from 40% in 2021. Advisers expect this figure to climb to 47% by 2031.

One factor distinguishing top-ranked wholesalers from the rest was communication. The survey, conducted in May among 610 financial advisers across all distribution channels, found that 80% of respondents preferred working with a single point of contact. The most effective method of communication was face-to-face meetings, with an average rating of 4.2 out of 5.

Advisers’ preferences appeared to influence how assets were allocated across wholesalers, according to Lisa Travaglini, director of editorial at Fuse Research Network.

“The quality of the wholesaler relationship is a major differentiator in adviser loyalty,” she wrote in an email to PLANADVISER.

When advisers were asked the primary reason that a wholesaler was a major distribution partner, 61% of respondents cited strong investment knowledge, 52% cited understanding of the adviser’s business, and 48% cited a long-term relationship with the wholesaler.

“The strongest relationships are built on expertise, trust and a deep understanding of the adviser’s business, rather than on sales frequency alone,” Travaglini wrote.

Additionally, advisers rated “answering product and strategy questions” as the most valuable service provided by internal wholesalers (4.1 out of 5), and they favored investment specialists and exchange-traded fund specialists within asset management firms.

Advisers placed the greatest value on specialists who provide expertise that directly informs portfolio construction and investment decisions. Investment specialists received the highest value ratings, with 57% of advisers rating them a 4 or 5 out of 5. Portfolio construction specialists and retirement specialists each had 50% of advisers rating them 4 or 5.

“Although this study was not limited to retirement plan advisers, one finding is especially relevant: Advisers increasingly concentrate their business with a small group of trusted partners,” Travaglini stated. “As products become more sophisticated and retirement planning grows more complex, firms that consistently provide knowledgeable support, particularly through retirement specialists and investment specialists, are better positioned to become part of an adviser’s core relationships.”