Dutch respond to unified approach

At Merrill Lynch Investment Managers (MLIM) and its competitors, restructuring the sales force has been vital to address changing markets in Europe. At the same time as James Charrington was given responsibility for the European retail business in early 2004, all institutional business outside the UK was also outsourced to him. He then identified certain markets, such as Germany and the Netherlands, where he felt there was a greater opportunity to win assets from institutions and other key distributors.

By having just one business facing the market, with both institutional and retail skill-sets, Mr Charrington has been able to avoid conflict between competing sales teams. Instead, a unified team is able to service the same institution, which may be looking to award sub-advisory mandates as well as choose funds to be distributed through bank branches.

In the Netherlands, a string of successes with new clients followed the appointment of Lenn Meijaard. “There was no retail business when we hired him three years ago,” says Mr Charrington. “But in the last 18 months, we are the only firm to have got onto all four platforms,” he adds, referring to lucrative distribution arrangements with Dutch banks Fortis, ING, Rabobank and ABN Amro.

“Lenn is responsible for institutional sales and he provides a good demonstration of the institutional approach these banks have to open architecture. The Dutch laughed in your face four years ago, but today, the most aggressive push to open architecture comes from the Netherlands.”

Each relationship manager is judged according to productivity. But this should include some reward for keeping existing clients happy, says Mr Charrington. He points to McKinsey research that shows 83 per cent of client advisers in the US incentivised on gross rather than net sales.

“This means nobody is being incentivised to retain clients,” says Mr Charrington. “This is extraordinary in a world where relationship management is supposed to be such a huge area.”