The One Question to Ask Passive-Leaning Advisors
Second in a series of posts on the sales and marketing implications of the ongoing debate between active and passive management. Read the first here.
A client came to us with an issue – internal wholesalers were repeatedly encountering the same objection when discussing the firm’s emerging markets products with advisors. The objection: I use index products for emerging markets exposure.
We suggested a number of ways to address this objection with facts (more on those later this week). But given the relative inexperience of many internal wholesalers, we suggested that they pose the objecting advisor a simple question:
Do you use actively-managed products anywhere in client portfolios?
Why is this type of question effective? Two reasons:
- If the answer is no, the wholesaler immediately knows that there’s not much point in further engaging the advisor. No further, unnecessary investment of time by anyone.
- In the more-likely scenario where the answer is yes, the wholesaler can open up a conversation on the criteria the advisor uses in evaluating active products. The discussion becomes advisor-centric, not product-centric, and sets the table for the wholesaler to better position the firm’s products.
So much of the active vs. passive management discussion is one that revolves around analytics and data. And for good reason. However, for firms dealing with this discussion in day-to-day field and phone interactions, it’s best to first focus on the client.