In the wake of the 2008 financial
crisis, one of the major tasks that European financial
regulators set out to accomplish was to examine how banks were
conducting sales operations and building client
Nine years later, with the fallout
from the meltdown as well as the subsequent euro zone crisis
still hanging over the Continent, both regulators and investors
continue to ask just how equitable those relationships are.
Initially, regulators pushed
forward with a plan to unbundle sell-side research from bank
relationships in order to mitigate banks incentive to
give their highest-paying clients more information, or favor,
than they provided everyone else. But reform initiatives have
persisted. Regulators and investors are zeroing in on fees,
product construction, and technology. Investors want better
service, and they want to pay less for it.
This makes the sales challenge ever
more complex and high-pressure. Salespeople must familiarize
themselves with an ever-expanding range of products with
increasingly nichelike functions to squeeze every last drop of
return out of a low-growth environment. When any investor can
pull up their online brokerage account and buy a low-fee
exchange-traded fund, who wants a relatively pricey middleman?
Sales teams have to focus on differentiation and value creation
or risk obsolescence.
Through all of this, the leaders of
Institutional Investors 2017 All-Europe Sales
Teams have stood out for their ability to balance client
service with contributions to their banks bottom
Back in 1999, when I started, sales was very
bottom-up, single-stock idea-driven, says Mehdi Ghozali
of Bank of America Merrill Lynch, who is one of the top-ranked
salespeople on the 2017 All-Europe Generalist Sales Team.
Since then, in equity sales we have had to adapt and
deepen our knowledge of credit, derivatives, macro, and
commodities dynamics just to understand what is going on and
properly advise our clients in their asset allocation
Ghozali, based in Zurich, has worked with a small,
close-knit group at BofA Merrill for 11 years. He says that
over that period the sales team has become as much
advisory-focused as product-oriented. Investors want to
understand both long-term and short-term perspectives, and they
look to their sales relationships for help. Commercially,
it is important to have a holistic view of client relationships
and be able to interact with other teams to craft a coordinated
approach and better use existing resources. This is something
key accounts reward, he explains.
Ghozali isnt the only BofA Merrill salesperson to
score on the generalist ranking: Timothy Cross, Regis Gonzalez
Lamoureux, Matthew Hale, Conor McEvoy, and Andrew Wilks all
receive high marks, giving the bank six of the top ten
vote-getters in the generalist category (McEvoy leads the group
in the ranking, just behind overall winner David Amato at Citi)
and handily propelling BofA Merrill to No. 1.
Cross agrees with Ghozalis assessment of the evolution
of sales. The process has changed massively since the
1990s, he says. No two days are the same.
In the specialist lineup BofA Merrill is narrowly outpaced
in total positions by J.P. Morgan Cazenove, which also takes
top honors for number of first-team positions awarded.
To select the members of the All-Europe Sales Teams,
Institutional Investor asked voters in the
All-Europe Research Team survey to rank the best generalist
and specialist salespeople. The two rankings were created from
1,165 responses from buy-side analysts and money managers at
more than 550 firms that collectively oversee some $4.8
trillion in European equity assets.
How much difference does a top-ranked sales team make in a
banks overall performance? Although thats always
hard to quantify these banks are massive, global
machines sales does remain a key custodian of
relationships with clients, customers, and counterparties. And
Bank of America did report its best fourth quarter in years in
early January, with trading revenue surging as stock markets
rallied just after the U.S. presidential election.
Somebody must be selling something.