Business Guides

Serve Client Needs, or Die

Serve client needs, or die by David Merkel, CFA of Aleph Blog

Another letter from a reader:

Hi David:

Happy new year!

I’ve been reading the blog for about six months now and can’t thank you enough.  I have found so many of the post to be extremely thought provoking and helpful.  I also appreciate your openness about your faith.  As a young Christian man in the finance world I find it very encouraging.

I’m contacting you to ask a few questions but before I do that, let me give you some context.  This past April I started in sales on the fixed income trading desk at XXXXXXX.  My desk in particular is more “middle market” focused and has a strong tax exempt muni bias.  Although there is an effort to grow our mortgage business, most of our taxable business would be considered more “retail”.  That said, I have spent my last 10 months or so traveling YYYYYYY visiting with all sorts of institutional investors trying develop relationships that will eventually result in a trading relationship.  I’ve met with anywhere from small community banks, to a larger insurance company, and even sat down with a few portfolio managers at a state pension fund.

What I’ve learned from this experience is that one, we don’t have much of a “call” into some of these folks.  One example is the pension fund.  They really aren’t gonna care on any of our exempt positions and we dont bring any large taxable deals for there to be a great fit.  Ive also learned that there are many internal hurdles I am going to have to endure in order to develop a sustainable network of individuals to call on. (Account assignment, crm software, trader skill

All this considered, I’m wondering if you have any words of wisdom for a young aspiring fixed income sales person?  Any dos and dont’s from the coverage you’ve had over they years?  What can I do to set myself apart from my competition?

I realize you probably get inundated with emails so no rush on my end.  Just thought I’d reach out. 

Dear Friend,

I get a lot of emails, but I am not inundated.  Let me give you the perspective of a former corporate bond manager.  I divided my coverage into three groups: those who produced value every day, those who could help me occasionally, and those who could help me rarely, if at all.  I was not like those at the company that acquired my firm.  I would do business with anyone, so long as they offered value.

Yes, that is more difficult to deal with than limiting coverage, but I was aiming to do the best for my client.

You are in a difficult spot.  Your company needs to align itself with the market; it needs to seek a niche where it can add value for clients in a way that fits their tax status, yield needs and liabilities.  Look for niche areas where intelligent investors could provide adequate yields with safety.  I had several brokers that specialized in niches, and I used them to a high degree.

This would require a research effort from your firm that would reveal values to clients and potential clients.  But with most business efforts, client needs come first.  Re-orient the business to serve client needs, or die.