Wholesalers: Positioning for Success

March 2024

Henry Ford, renowned American businessman, is attributed with saying, “If there is any one secret of success, it lies in the ability to get the other person’s point of view and see things from that person’s angle as well as from your own.” The ability to see another person’s viewpoint is fundamental to being a wholesaler, but wholesalers who clearly demonstrate their value and understand the financial professional’s business model are better positioned for success.

Wholesaling is Competitive

A shared, comprehensive understanding of financial professionals’ practices and preferences is essential, not just for the wholesaler’s success but also for the carriers they represent and the financial professionals they call on, with 7 in 10 financial professionals agreeing that a good relationship with a wholesaler can often be the determining factor when selecting a carrier with which to place business. Furthermore, in the last year, 6 in 10 financial professionals established new wholesaler relationships and placed business with them. Seeing things from the financial professional’s point of view is critical.

Being the coveted wholesaler for a financial professional is competitive and challenging. Eight in 10 financial professionals say many wholesalers call on them, but they place most of their business with only a few. Almost 9 in 10 financial professionals say the wholesalers they work with are delivering value-added services beyond product expertise. This aligns with wholesalers’ opinions.

Wholesalers and financial professionals also agree that the top two most common drivers of interaction between them are for explanation of product and generation of client solutions.

When asked about wholesaling services that have the most positive impact on their practice, financial professionals say providing product overviews and updates is, by far, the most impactful, followed by product positioning within a portfolio. External wholesalers believe product positioning within the financial professional’s portfolio followed by case design assistance have the most positive impacts on a financial professional’s practice.

Relationships are the heart and soul of wholesaling. On average, financial professionals have been working with their most valuable wholesaler for 10 years. Financial professionals typically interact with wholesalers two to three times before business is placed with the company the wholesaler represents. Wholesalers who secure business from financial professionals are those with good in-person relationships, strong product knowledge and industry expertise.

Point-of-sale assistance is a value-added service. On average, 13 percent of a financial professional’s sales include point-of-sale assistance. The most helpful aspects of point-of-sale wholesaler assistance are to address complex client needs and to explain product details to the client. According to financial professionals, point-of-sale assistance is typically delivered in person 40 percent of the time. Twenty is the average percent of external wholesaler sales that include point-of-sale assistance. Many wholesalers and financial professionals agree (almost 8 in 10) that virtual communication is effective for point-of-sale assistance.

While 35 percent of financial professionals are neutral, 50 percent favor working with a true, traditional external wholesaler versus a hybrid wholesaler for the following reasons:

1. The external wholesaler’s ability to build strong, in-person relationships.
2. External wholesalers are more experienced with better product knowledge.
3. They have more time to spend one-on-one.

Data analytics are now incorporated in both wholesalers’ and financial professionals’ business practices. Almost two-thirds of external wholesalers say their in-person meetings are being driven by data analytics. Many financial professionals, 9 in 10, are also incorporating the use of data analytics into their practices. Looking forward, 86 percent of financial professionals expect improved data analytics support from wholesalers and the carriers they represent.

In three years, the in-person wholesaling model is expected to be most valued by financial professionals and external wholesalers alike. Subsequently, both parties predict increases in both their one-on-one in-person and virtual meetings.

*Wholesalers and financial professionals were asked the same question.

Financial professionals will continue to value external wholesalers for their product expertise and support. Wholesalers who understand their preferences and adapt will succeed because as Henry Ford also said, “Quality means doing it right when no one is looking.”