Recap: BDA’s Annual Sales Manager Roundtable

On Thursday, April 25th the BDA held its annual Fixed Income Sales Manager Roundtable, hosted by FTN Financial in Memphis, Tennessee.  The event was attended by sales managers and fixed-income leaders from middle-market firms nationwide and there was an active discussion of the biggest sales-related issues facing middle-market broker-dealers in the fixed-income markets. The roundtable was followed by a networking dinner at McEwen’s in downtown Memphis.

The key issues discussed during the roundtable included: demographics of the sales team and clients, recruiting and retaining talented and diverse sales people, training programs, rising costs of data and other technology, compensation models, and trends in sales technology.

Key Topics in Sales Management

Discussion Leader: Steve Pulley, Crews & Associates

  • Managers are facing many challenges in a rapidly changing sales environment; from new regulations and rising costs in technology.  What are firms doing to keep up in this changing environment?
  • Continued rising costs in technology
  • How does this change compensation model for sales team?
  • Increasing legal and compliance cost due to regulation
  • Regulations discussed were FINRA Rule 4210 and the ongoing TRACE pilot
  • How to adapt business model for increasingly young buy-side clients
  • Included in the discussion were communication methods, and how to grow interest in fixed-income
  • Sales team dynamics – Which formula works best for productivity?

Developing and Retaining a Talented Sales Force

Discussion Leader: Mat Parker, Raymond James

  • Senior members of sales teams are closing in on retirement age and firms are struggling to attract and maintain millennial and diverse employees.  How are firms adapting to the change? And what methods seem to be working in retention?
  • Aging sales-force and how to transition
  • Discussed were compensation methods for retiring sales team members – This included 24-36 month declining scale, post-retirement compensation model
  • Methods for engaging and increasing diversity in fixed income
      • Firms discussed internship programs that have increased diversity
      • Firms also are working to engage talent at a broader range of colleges and universities
  • What are firms doing to ensure talent is well trained and ready to step into a more senior role

Technology and Sales

Discussion Leader: Todd A. Shearer, Fifth Third Securities

  • As electronic trading continues to grow, what changes are sales managers making in order to keep up with the changes and trends?
  • What are the impacts of electronic trading advances in the markets and spreads, transparency and liquidity?
  • The impacts of “data scrapping” were discussed as well the costs associated
  • How do you handle commissions/sales credits for trades that are done electronically?
  • Firms discussed which compensation models are working best currently, and what the long term impacts of increased usage of electronic trading will do to compensationThis included how to attract young talent if compensation continues to trend lower
  • How do your customers want to talk to you, and how do you adapt to add value?
      • Call vs. email were debated as best methods.  The generational divide on preference was also discussed
      • Firms also recognize that there is not a “one size fits all” method to communication, and that their clients are becoming much younger

BDA Legislative and Regulatory Update

Discussion Leaders: Kelli McMorrow and Brett Bolton, BDA

BDA staff discussed key regulatory and legislative items that are directly effecting the market and business practices. This included:

  • FINRA Rule 4210 and the ongoing TRACE pilot
  • MSRB Rule G-23, Activities of Financial Advisors
  • BDA’s Fixed Income Market Structure Working Group
  • “Pennying”
  • Capitol Hill Update on Advance Refundings, Infrastructure, and GSE reform efforts.
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