How To Change Face Of ETF Distribution

June 24, 2020

Jillian DelSignore is principal at Chicago-based Lakefront Advisory, a firm focused on improving and scaling distribution strategies in the ETF industry.

Over the last three months, nearly every conversation I’ve had with ETF industry peers includes the same question: “What do you think the future of ETF distribution looks like in this more virtual world?”

It is the million-dollar question, and one that is incredibly important to think through as we adapt to a new normal that includes less in-person interaction.

But the punchline is, no one knows yet.

In my two decades in distribution, with over half of that time spent in the ETF industry, there’s been a lot of change, but nothing as dramatic as what is immediately ahead of us. This change was ultimately coming to our industry, but COVID-19 has accelerated that timeline.

New Challenges

There are challenges to a more virtual sales model, such as establishing new client relationships, adjusting to more use of technology, keeping productivity high and staying connected to our teams. These challenges exist because of how we have operated in the past, putting priority on in-person meetings.

These aren’t so much challenges as much as opportunities to create a new playbook for what it means to establish new client relationships. We do it all the time with colleagues—how many do you have that you rely on every day whom you’ve never met?

There are outright positives to come from a more virtual sales world: the efficiency of being in front of clients without travel time, the ability to reach more remote geographies, and—a less obvious benefit—the ability to have more women and diversity in sales.

Women remain underrepresented at the highest levels of financial services, and the same is true for women in distribution. Consider that of the 5,000+ global members of Women in ETFs, less than 5% have roles in distribution.

If we broaden out, you see this is not a uniquely ETF or even financial services industry issue. A LinkedIn study shows 39% of women are in sales roles, while a CEB study goes further to show that number drops to 19% in sales leadership roles. Considering women make up 51.1% of the workforce, those numbers are striking. Our clients are diverse, yet those in front of them every day couldn’t be further from it.

One of the primary deterrents for women in sales leadership is the high level of travel required—time away from family—in these roles. In the best of circumstances, with a small territory close to home, there are still evening obligations and some level of travel required. But in the last three months, we’ve gone virtual in so many aspects of our lives, and travel is essentially no more.

Even when it does become safe to travel again, I’m not sure we will ever see it pick up to previous levels, for two main reasons. First, we are realizing the efficiency of meeting our clients virtually, and two, our clients prefer it in many cases. This is potentially a very positive development for attracting more women to sales and distribution roles.

For the industry to truly see this change, we must start rebranding sales as a career to attract women in the first place. This shift to a more virtual world can change this conversation for the better as women see that they can have successful sales careers without having to make the trade-off of work and family.

What can we, as an industry, do to help?

First, we all need to share this message with those in our immediate circles. Tell them how this sales and ETF distribution role is evolving, and making it an even more attractive path for women than it had been before.

We can mentor young women at our firms, on our teams and even in our families so they can begin to see a path for themselves toward these roles. This one I can’t emphasize enough. I am proof of the positive impact strong women mentors can have on one’s sense of what’s possible.

Finally, we should try to get to these young women before they’ve made that first career decision; meaning that we should focus on university outreach to help them understand the benefits of a career in financial services, ETFs and sales. These are the actions that will help us change the face of sales in the industry.

None of us will ever forget this unique time in our lives and the challenges it presented both personally and professionally.

But focus on the positives. It’s not surprising to hear many say they actually felt more connected than ever despite the isolation as we all learned to adapt to meeting virtually. It’s taught us that we don’t have to be in the same room to effectively connect with friends, family, colleagues, and, yes, with our clients. Let’s turn our collective attention to making this evolution to a more virtual world a time we remember when innovation helped change the face of distribution.

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