Firms Will Shift Towards More Base And Bonus Compensation In 2017, According To DST kasina

NEW YORK, Oct. 24, 2016

The Productivity Insights report finds that asset management sales teams expect to achieve slightly lower gross sales but better net sales results in 2016, leading to lower total compensation for salespeople. Firms are restructuring their compensation procedure to lean towards higher base and bonus payments in order to address the decline in total compensation, which is dependent on gross sales commissions.

"This shifting landscape is the result of the challenging and competitive industry environment continuing to impact sales this year," says Steven Miyao, President of DST kasina. "Firms are changing their salesforce compensation structure to regulate total returns for their sales teams and reflect their corporate goals and strategies. This base and bonus driven compensation structure are expected to result in improved net sales, as salespeople will be incentivized to nurture relationships with advisors who will hold their assets longer."

The report's other key findings are:

• National sales team, including external, internal and hybrid salespeople, is expected to grow 4% in the next 12 months;
• Total compensation for the national accounts team increased 2-3% in 2016;
• The average firm has 104 salespeople who are expected to bring in $24.8 billion in gross sales and will receive $21.7 million in total compensation; and
• More than 30% of asset managers acknowledge their CRM system needs cleaning up as duplicates and inactive advisors decrease the productivity of their sales efforts;
• The average sales team does business with 17.3% of advisors in their CRM.

"Firms understand the need for more in-depth and efficient data and analytics when it comes to their advisors," said Mr. Miyao. "In meetings with clients and at our roundtables, senior sales executives want accurate, timely information about opportunities with advisors – and they expect sales teams to leverage this data as part of their sales planning and rotation."

The 2016 Productivity Insights report is based on a survey of 28 asset management firms, including ten of the largest firms, on their current and future plans for compensation, staffing, team structure, expenses and activities for their sales force and national accounts team. The firms surveyed had total intermediary assets under management of $1.74 trillion.

For more information on DST kasina's 2016 Productivity Insights report, contact Myra Bartalos, Head of Marketing, at mbartalos@kasina.com.