Institutional Investment Sales Professionals – Still Facing a Whole New World

“Knowledge must continually be renewed by ceaseless effort, if it is not to be lost. It resembles a statue of marble which stands in the desert and is continually threatened with burial by the shifting sand. The hands of service must ever be at work, in order that the marble continue to lastingly shine in the sun. To these serving hands, mine shall also belong.”

~ Albert Einstein, 1950

Precipitated in large part by the Financial Crisis of 2008, the role and expertise required of the institutional sales professional have had to evolve – from benchmark-centered product sales to a consultative approach that focuses on client needs and outcomes. After the financial crisis, the smoke of scorched markets cleared to reveal a new, more complex world for fiduciaries and the managers who serve them. For many, the collective haunt of negative or single-digit returns, illiquidity when liquidity was needed most, and higher correlations across asset classes gave rise to a specter of shortfalls in meeting objectives and greater challenges in closing funding gaps.

The needs of the institutional investor vary – encompassing absolute returns, alpha, relevant diversification, liquidity, volatility reduction, income, reduced funding gaps, asset-liability matching or inflation protection. To address specific needs, institutional investors need to work with managers who are experts on capital markets worldwide, understand correlations and risk exposures, and who can offer or create solutions.

“Buckets and Boxes – Let’s Fill Them!”

Prior to the financial crisis, institutional sales professionals predominantly represented products – such as Large Cap Value, Small Cap Equity, International Equity, Fixed Income selections – to institutional investors who had mapped out fairly rigid asset allocation buckets and style boxes to be filled with defined investment products. For the most part, consultants and institutional investors knew exactly what buckets and boxes they were looking to fill, and would meet with those institutional sales professionals who had the products to fill the buckets.

Benchmarks were well defined. Relative performance to benchmarks and peers drove business. Agendas were straightforward. Managers simply let the prospect know which bucket or box they inhabited, how they fared compared to other managers in those buckets or boxes, and how they would be able to repeat their investment successes. Sales and communication processes were nearly formulaic. The Four Ps dominated: Philosophy, People, Process and Performance. If the “product” managers didn’t prove to be “good” (outperforming benchmarks and peers), they were fired and replaced by “better” product managers in those buckets and boxes.

Many managers’ products, however, did not fit in the buckets or boxes. Some, in order to grow assets, either forced their products to fit or launched products that did. Others left the confines of the traditional institutional investment world and moved into the more receptive realms of Endowments, Foundations or High Net Worth. A few pioneers revolutionized communications with the institutional investor market – identifying what they perceived to be the real needs of institutional investors, and communicating why investment offerings outside traditional buckets and boxes may be better solutions. This generally proved to be a hard sell.

“Needs and Solutions – Let’s Meet Them!”

Once the smoke of the financial crisis cleared, revealing harsh new realities, institutional investors started demanding more. Standard 60:40 asset allocations and benchmark-investing were no longer right for all investors. Almost overnight, investors and fiduciaries began shedding traditional asset allocations and style-box methods to explore what was really needed to achieve successful long-term investment outcomes.

Simultaneously, globalization led to expanding investment markets, innovation created new instruments and new markets, and the inspired vision of those with proven investment prowess brought inventive solutions to the forefront. The traditional model of selling an investment firm’s history, AUM size, products and the Four Ps became less effective. The challenge became how to position investment offerings in context of dynamic, newly appreciated needs and goals of institutional investors. Thus, the evolution of institutional sales professionals from “product sales” to “consultative sales.”

“The Hands of Service”

What does “consultative sales” mean? Many professionals were already successful at the consultative sales approach. The attributes of the evolved institutional sales professional include the following:

  • Expert investment knowledge. An MBA, CFA and/or minimum ten years in-depth investment industry experience are mandatory, as evidenced by the demand for former consultants and/or product specialists to serve as client service or sales professionals. Expertise must expand beyond a single style or asset class, and sales professionals now must demonstrate a strong grasp both of the risks institutional investors face, and of the diverse competing solutions that are effective in meeting long-term institutional investor needs. The sales professional needs to be conversant on correlations, liquidity, risk budgets, leverage, hedging, different financial instruments and leading-edge solutions. Remember, time is limited, information overwhelming and insights valued.
  • Strong probing and listening skills. A client service or sales professional must be able to ask the right open-ended questions to elicit objectives, preferences, objections, concerns, biases and opportunities. Unless specifically invited to do so, walking in and delivering a product presentation at the first meeting will limit a firm’s capability to one category in a prospect’s mind. The ability to ask the right questions at the right time, and respond appropriately, demonstrates to the client, prospect or consultant the value of working together. Strong listening skills earn respect and are also helpful in qualifying clients and prospects.
  • Empathy. A sales professional must know what actions would be most worthwhile for the buyer and when they should be offered. Attempting to sell a product prematurely or asking for the wrong actions frequently and regrettably result in no more meetings.
  • Insightful, personalized follow-through. There should always be follow-through actions. It is not enough to send a rote thank-you letter with performance information attached. It is not enough to send a social thank-you note mentioning kids, hobbies or vacation spots. What challenges or concerns are absorbing the time of the prospect or client? What would help that individual to tackle his or her challenges? A consultative approach means you are there to help. How can you help?
  • Representation of the client/prospect/consultant within the firm. In today’s highly competitive market, everyone needs to elevate their skills in communicating with clients, prospects and consultants. Consultative institutional sales professionals effectively convey and disseminate within their firms the priorities and concerns they learn from clients, consultants and prospects. Investment professionals who are well versed in the prospect’s needs and biases can advance prior conversations by bringing highly focused, relevant content to that client or prospect when they meet.

As Einstein challenged in 1950, “Knowledge must continually be renewed by ceaseless effort…” Change in our industry is continuing rapidly. It’s an exciting time to be a part of the institutional investment world, but not a time to stand still. It is a time to learn, to develop, to evolve. It is a time to keep our hands of service hard at work.

Tell us how you and your firm have evolved. Please comment below and share this article if you found it helpful. Stay engaged by following us!


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

Maximizing Institutional Investment Product Specialist Success

The Product Specialist role has gained a prominent, valuable place in the institutional investment management arena. These professionals enhance an asset manager’s client, consultant and new business initiatives. They leverage the time of investment professionals by spearheading or contributing to a spectrum of responsibilities, including:

  • Serving as a proxy for investment professionals in client review meetings, consultant meetings and prospect presentations
  • Acting as a liaison between investments and distribution
  • Leading new product development
  • Writing investment commentaries
  • Developing thought leadership pieces, webinars, blogs, etc.
  • Conducting internal educational and training sessions
  • Attending and speaking at industry conferences and forums
  • Overseeing RFPs and database updates
  • Providing quality control in reviewing client reports, prospect presentations, and other materials and media (e.g., website and/or database content)

The role comes with a variety of titles – Product Specialist, Client Portfolio Manager (CPM), Asset Class Specialist, Portfolio Specialist, Investment Specialist, etc. Just as the titles and responsibilities vary from firm to firm, so does the effectiveness of different Product Specialists and CPMs. It can be challenging to overcome the preference of clients, consultants and prospects to meet with a portfolio manager.

Five Keys to Success

Following are important variables and attributes that enhance the credibility and success of Product Specialist professionals.

  1. Relevant Credentials and Qualifications
    More than ten years of institutional investment industry experience is generally required. Many of the top Product Specialists and CPMs have 20+ years of experience. An MBA and CFA are preferred. Depending on the asset management firm’s client base and target markets, other credentials and certifications (e.g., CPA, JC, CIMA, Series 7, 63/65 or 66, etc.) can be beneficial as well. Individuals who have a portfolio management, consultant or plan sponsor background are ideal. They usually take the role further faster than sales or client service professionals who transition into the role. Professionals in this role must be willing to travel and have a deep understanding of the competitive landscape. Not only should they personify the portfolio manager, but the investment firm as well.
  2. Outstanding Communication Skills
    Strong verbal and written communication skills are essential. As subject-matter experts, Product Specialists must be able to articulate the investment process and portfolio strategy, and to discuss specific portfolio holdings and performance attribution as well as, if not better than, the portfolio managers. Product Specialists must be able to engage clients, consultants and prospects in strategic discussions. They must excel at eliciting and addressing needs, interests and concerns. Proficient writing skills are mandatory to contribute to messaging, marketing materials, presentations, investment commentaries, thought pieces and other written communications.
  3. Reporting Lines Directly to Investments
    The most effective Product Specialists sit with, report to and are respected by investments. They are fully engaged with the investment team, short of making investment decisions. They attend investment meetings, review trades and know the portfolios. Having Product Specialists report to distribution, as some firms do, can be an impediment. In a distribution-led structure, Product Specialists are perceived as being in more of a sales role. Clients, consultants and prospects are less receptive to having them as a substitute for the portfolio manager. Whether a Product Specialist reports to the CIO or investment strategy portfolio manager depends on the size of the asset management firm and the specified role of the individual. If the Product Specialist is a generalist by asset class, reporting to the CIO is more common. If the Product Specialist is focused on a specific strategy, they typically report to the lead portfolio manager on the strategy.
  4. Effective Teamwork
    To succeed, Product Specialists must have good working relationships and strong collaboration with virtually all functional areas in their firm – investments, marketing, client service, sales, administration, operations, compliance and business management. Effective teamwork is vital in marshalling an investment firm’s resources to provide optimum solutions and value to clients, consultants and prospects. Strong internal communication, enhanced by consistent use of a CRM system to document calls, meetings and activities, and to keep everyone informed, is a given.
  5. Proper Incentives
    Compensation structure and incentives aligned with the mission of the firm and the desired objectives for the Product Specialist role (e.g., client retention, enhanced consultant relationships and number of strategy approvals, closing sales, product development) are crucial. Incentives to foster teamwork between Product Specialists and professionals in other roles (e.g., sales, client service, consultant relations) must be in place as well.

Benefits of the Product Specialist Role

It is unrealistic to expect Product Specialists to replace portfolio manager interactions with clients, consultants and prospects completely. Product Specialists can, however, allow portfolio managers to travel less and to focus primarily on investment management. In addition to the potential for enhanced performance, benefits of the Product Specialist role include:

  • Stronger lines of communication among marketing, sales and investment teams
  • More comprehensive and regular interactions with clients, consultants and prospects
  • Increased opportunities for client retention and asset growth

What is your firm doing to maximize Product Specialist success? Please share your insights and comments below.

Stay engaged by following us.


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Christine Røstvold, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Christine was a founding board member of PAICR (Professional Association for Investment Communications Resources), and served on the Advisory Board for more than a decade.

Evolution of Institutional Investment Sales

How have institutional sales changed?

Standard 60:40 asset allocations and benchmark investing used to be the blueprint recommended for all investors. Sales and communication processes were nearly formulaic. Managers simply let the prospects and consultants know which buckets or boxes they inhabited, how they fared compared to benchmarks and other managers in those buckets or boxes, and how they would be able to repeat their investment successes. Send your quarterly performance and fill out RFPs. The “Four P’s” dominated: Philosophy, People, Process and Performance. If the “product” managers didn’t prove to be “good” (outperforming benchmarks and peers), then they would be fired, and replaced by “better” product managers in those buckets and boxes. Today, many searches are conducted without an RFP even being distributed.

Risks led to change.

With the global financial crisis showing investors what true risks were – loss of capital, illiquidity, lack of true diversification, inability to fulfill liabilities and obligations, things changed. Almost overnight, institutional investors and fiduciaries started shedding traditional asset allocations and style-box methods to explore what was really needed to achieve successful investment outcomes.

Innovation led to choices.

Simultaneously, globalization, academics and technology expanded investment markets, and innovation shaped new instruments, new approaches and new ways to allocate. The inspired and creative vision of those with investment prowess brought better solutions to the institutional market. The old model of selling an investment firm’s history, AUM size, the “Four P’s” and products became less effective.

Choices led to challenge.

The challenge became how institutional clients in context of their dynamic, newly appreciated needs and goals then determined what array of solutions best made sense for their individual plans. This new practical world of understanding the real purposes of an asset pool, of managing the real risks of an investment program and of capitalizing on ever-expanding investment opportunities requires a thoughtful approach in identifying solutions.

Challenge led to consultative selling.

Thus, institutional sales professionals were led to evolve from “product sales” to “consultative sales.” The attributes of the consultative sales professional at the minimum are:

  • Expert investment knowledge. An MBA, CFA and/or minimum ten years in-depth investment industry experience are mandatory, as evidenced by the demand for former consultants and/or product specialists to serve as client service or sales professionals. Their knowledge must expand beyond a single style or asset class, and they must demonstrate a strong grasp of the risks and the numerous competing solutions facing institutional investors. The sales professional needs to be conversant on liquidity, risk budgets, leverage, hedging, different financial instruments and leading-edge solutions. They need to be well versed on quantitative, systematic and traditional investment approaches. Understanding attribution and correlations is key. Remember, time is limited, the volume of information overwhelming and insights valued.
  • Strong probing and listening skills. A client service or sales professional must be able to ask the right open-ended questions to elicit objectives, preferences, needs, objections, concerns, biases and opportunities. Walking in and delivering a product presentation at the first meeting will corner a firm in one category in a prospect’s mind. The ability to ask the right questions at the right time, and respond appropriately, demonstrates to the client or prospect the potential value of working together. Strong listening skills earn respect. They also are helpful in qualifying the prospect.
  • Empathy. A consultative sales professional must know what actions would be most worthwhile for the buyer and when. Premature product selling or asking for the wrong actions can regrettably mean no more meetings. Sales professionals and portfolio managers must leave their egos at the door.
  • Insightful, personalized and proactive follow-through. There should always be a follow-through action. It is not enough to send a rote thank you letter attached with performance information. It is not enough to send a social thank you note mentioning kids, hobbies or vacation spots. What challenges are absorbing the time or concerns of the prospect, client or consultant? What would help them to tackle those challenges? What intellectual capital do you have at your disposal to bring to bear for the prospect, consultant or client?
  • Representation of the client/prospect/consultant within the firm. In today’s highly competitive market, everyone needs to elevate their skills in communicating with clients, prospects and consultants. Consultative institutional sales professionals effectively convey and disseminate the priorities and concerns they learn in their interactions with the market within their firms. Investment professionals who are versed in the prospect’s needs and biases can have meaningful dialogues and bring highly focused, relevant solutions to that prospect, client or consultant.

Consultative Selling Can Lead to Success.

Institutional investors want and need to work with managers who are knowledgeable on capital markets worldwide, who understand risks and the importance of time, and who can offer solutions relevant to solving specific needs. Intellectual capital is as paramount as performance. Future success depends on asset managers elevating the role and expertise of all their institutional investment sales professionals. The benefits are multiple. First and foremost, clients are better served. Second, while a consultative approach can be demanding, the intellectual rewards are immense. The profession is elevated to a higher calling.


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

Distinguish, Distinguish and then… Distinguish Some More

Speech from IMI 33rd Annual Consultants Congress

March 30, 2016

By Jackie Charnley

As all of you know, in the institutional world, investors hate being sold. They want to buy. They want to buy smart. They want to understand exactly what they are getting. They want as much value for fees paid as possible.

Distinguishing yourself from your competitors is easy if you:

  • Invest in only three emerging markets in the world
  • Or you invest in actively managed ETFs of companies benefitting from disruptive innovation
  • Or you are a deep value manager with low correlations to indices, peers or other styles, and you invest with a ten-year investment horizon

We work with these three managers, and their distinctive approaches do help them to stand out from competitors. Their challenge is to find investors who want a one-of-a-kind smoked salmon dish served with pistachios, cranberries and citrus sauce.

In a world of prospects who do not want to be sold, and in a world where there are hundreds of strategies that seem the same, how do you stand out?

Authenticity, Brevity and Clarity. The ABCs of communicating with institutional investors.

Authenticity. Begin by understanding your strengths, both absolute and relative to the competition. Build on the deepest truths about the value you add. Is it how your team is organized to make decisions? How you research themes? How you research companies? Is it your universe? How you manage risks? Identify and convey those strengths.

What proof exhibits are available to support your messages? Look at performance attribution, risk metrics, competitor messaging. What do they tell you? More importantly, what benefits to clients result from your approach? By identifying the key messages on the value added by your firm, having strong proof exhibits and conveying benefits, you will be able to build a credible, authentic story that conveys your firm’s distinctions.

Brevity. Limit the number of messages you convey. Three on your firm. Three on your strategy. Be prepared to give an elevator pitch as easily as a one-hour formal presentation.

Questions and answers are equally as important as planned remarks. Prepare concise responses to most frequently asked questions, and to the toughest questions raised. The more the question evokes a defensive or emotional response, the more you need to work on the response. Never over-answer questions. Answer just enough to engage your audience members, so that they will want to learn more and will ask you more questions. A dialogue is always better than a monologue. Use “the power of three.”

Clarity. Say what you are – not what you are not or what your competitors do or don’t do. Show, not tell. The old adage, a picture is worth a thousand words, is as valid as ever. Think about how can you show (versus tell) what makes you distinctive. Institutional investors and consultants are analytical and skeptical. Videos or data over time are more informative than snapshots. Attribution, factor exposures, risk metrics, rolling periods for returns. Show what your approach will contribute to the buyer’s experience. Show what the investor can expect in different market environments. Show several buy/sell/trim decisions. Show the dynamics of how you make decisions. Be transparent and let them know you are transparent.

In terms of clarity and transparency, don’t leave it to the client or prospect to guess the benefits of your approach. In today’s world of diverse and ever-changing needs, the host of benefits an investment firm can offer has exploded beyond just returns. Are you offering better risk-adjusted returns, or high-alpha, high-volatility returns? Are you helping the client gain increased diversification or exposure to an inefficient, less covered universe? Are you matching liabilities or increasing DC participant readiness? Are you offering low correlation to benchmarks and peers? Does your firm’s intellectual capital help your clients in exponential ways? Is your approach cost-advantaged in any way? Drill down to find as many benefits to clients as possible. Convey those benefits.

Now, we’ve covered how you can distinguish yourself in terms of content. But are there other ways to make your firm stand out?

Absolutely!  Multiple ways.

Research

One of the most effective ways to distinguish your firm is through preparation. Prepare from the first moment you are informed of an opportunity. First, ask the person who told you about the opportunity if they have time for a call to learn more about the prospect. If yes, schedule a call. That gives you time to do some independent research. If no, ask your questions right then. Key questions are:

  • What are the main reasons for the search and what are they looking to accomplish? If for replacement reasons, ask who was terminated and why.
  • Who are the participants and what are their roles?  How knowledgeable are they?
  • What are the key reasons you were included as a finalist?
  • On what do they want you to focus?
  • Are there any specific questions, objections or issues they want you to address?
  • Who are the existing managers, who are the competitors and how do you compare?
  • Will they share their Investment Policy Guidelines or any other materials with you?
  • Is there an opportunity for a breakfast, lunch or dinner?
  • Is there anything else you should know but haven’t asked?
  • What would they recommend so you can distinguish yourself?

Prepare a summary of your history with the prospect’s organization and the consultant (if there is one), and what you may have learned from any phone conversations. Research the prospect’s history, searching for press releases, articles, professional background, or speeches. Review the entity’s website. If it is a public plan, review available meeting minutes and the manager line-up. Research the competitors, seeking to understand their competitive advantages and disadvantages relative to your own. Include the names and professional credentials of all individuals to whom you will be presenting. Circulate the RFP response to everyone who will be attending so they can review in advance. Messaging and answers must be consistent with the RFP content. If there was a mistake in the RFP response, correct it before the presentation.

Customize the Presentation

If you know what is most important to the prospect and/or consultant, customize the presentation book to their needs and objectives. While you need a library of standard content, you should be able to customize the opening and the close, as well as reorder compliance-approved content. Create a list of issues, likely questions and tough questions that you may be asked, with concise, positive responses. Eliminate any unnecessary pages in your presentation. Reorder as needed.

Select Best Presenters

Actively decide who will be the optimal presenting team. Be wise, not political. Who are the best people to attend? Develop a meaningful role for every presenter. Provide the preparation documents and RFP response to everyone attending. Arrange a meeting to agree on participants, content, who will cover what, tough issues, time allocations, logistics, attire and rehearsal times. Decide who will manage the time.

Rehearse

Schedule your first rehearsal at least seven working days before the final. Practice prepared remarks, and responding to the likely questions and any tough questions you have been getting in the marketplace.

What are problem areas that typically arise?

  • Tentative language – “try, attempt, think”
  • Negative framing – say what you are versus what you are not
  • Empty language or filler words – “uh, um, if I may, may I share with you…”
  • Over-answers or, worse, no answers to questions
  • Overuse of “that’s a good question”
  • Run-on sentences –  “so, and, but”
  • Timing of the presentation – you must begin and end on time!
  • People who attend without a meaningful role
  • No use of the prospect’s, client’s or consultant’s names
  • People texting or reading emails during the presentation
  • Poor body language (posture, eye contact, tone of voice)
  • Attire (too casual, too formal, too much jewelry, cologne or a “look-at-me” watch or diamond)

Schedule another rehearsal immediately before the actual presentation.

Debrief and Improve
Select someone tough and experienced to role-play the prospect and/or consultant. Using a prepared form that systematically and objectively reviews content and delivery of each presenter, you practice giving the presentation. You debrief, noting aspects that can be improved. You develop a personalized, succinct opening and close, and practice giving them. You note other areas where you can customize the presentation to the prospect’s areas of interest. You time each segment.

Actively decide where the presentation can be shortened or pages reordered, where transitions can be improved, and who will need more work to deliver as strong a presentation as possible. What are each person’s priorities? If need be, switch presenters. Agree on how you will resume the presentation after responding to questions. Practice using the names of the individuals with whom you will be meeting, and the name of the plan or prospect entity. Commit to using the names.

Connect

Arrange to fly in the night before the presentation to have another rehearsal free of distractions from the office and to ensure you will be on time for the final. Ask if you can rehearse in the actual space, or at least visit it, if possible, in advance of the presentation. All agree on a time and place to meet. Go to the location well in advance. In case a meeting ends early, you may have more time with the audience. At minimum, walk in the room on time. If there are a manageable number of people, as you meet your audience members, you smile, shake their hands and use their names.

You are prepared. You connect. You will be distinctive.

Thank you.


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).