With the world going in and out of lockdown seemingly at random, and working from home becoming the new normal, issuers and distributors alike had to find other ways to engage with their clients.

“We moved to Zoom, just as the rest of the world did,” said Deryk Rhodes (pictured), managing director, Incapital, speaking during the Platforms, distribution and the future of US structured products panel discussion at the virtual SRP Americas 2020 Conference on 16 September.

Pre-Covid, Incapital frequently organised webinars, sometimes involving multiple firms, for which it used to get 30 to 40 people on a call. Since it started adopting Zoom, the company saw this figure increase to 125 to 150 people on every single call, according to Rhodes.

“The speed at which Zoom took over was just astounding,” said Rhodes. “Think of a wholesaler who is driving around and visits three or four people a day: with Zoom, the same wholesaler can easily visit 10-15 people a day. It is much more effective.”

Zoom is an essential way of getting people together, agreed Nataliya Popel (right), head of structured investments, Stifel. “Everybody can dial in from their car, from their home, from their office, from wherever they are. It is just a different way of doing business.

“Do we miss the face-to-face interaction? Absolutely. Relationships really matter to make a product successful. I think it will take some time for advisers and branches to open up again, but now we have other ways to interact with those advisers,” she said.

Yinglu Zhang (below), head of North America sales, structured investments, cross asset solutions, Citi, said that, due to Covid-19, Citi, as an issuer, is communicating more with its clients than ever before.

“My entire team is spending much more time talking about our products, talking about the market, talking about the advisor situation in their local areas, and because most of us work from home we don’t have to commute and we can dedicate a lot more time to the client," she said. “Personal meetings are very important and we will go back to that when things normalise."

Rhodes believes that, going forward, the use of video conferencing to engage with clients will be an integral part of doing business.

“I think it will be an absolute crime, if things do go back to normal in the next couple of months, for us to drop Zoom,” said Rhodes. “We will still have people on the ground, we are still meeting people in their offices, but it will be much more of a hybrid approach.”

Platforms

Moving on from communicating with the client base via a video-link, Michael D’auria (below) executive director at JP Morgan, who moderated the panel, asked whether structured product platforms in the US market had delivered on their promise.

“I certainly feel that we are seeing a lot of new broker dealers offering structured products because of the education, transparency and efficiency that the platforms are delivering,” he said.

According to Rhodes, there was a concern when platforms first started whether the industry would still need wholesale, but it was pretty quickly put to rest.

“In the past we would spend countless hours every month doing backtracking, lifecycle management, performance reports on certain trades, all this manual work. A lot of that is now at the touch of a button. That has freed us from doing all this trivial work. Wholesalers can now spent all their time selling," he said. "I think it is going to have a large impact in the long run where we will see structured products from a niche product moving to the mainstream. I can see structured products go head to head with some of the other asset classes."

At Stifel, which is in the final stages of integrating an electronic platform in its network, wholesaling and platforms are seen as complementary. “In a successful broker-dealer channel, when you are trying to grow and scale products significantly, it is crucial to have both a strong salesforce and a strong platform,” said Popel.

“It is all about data, data and data,” said Rafael Salvatierra (right), head of product structuring, origination and UHNW solutions, Bank of America/Merrill Lynch.

“Nowadays we have at our fingertips exactly what the attributes of a product are. Not just from a hypothetical historical perspective. Now you can position a product in a core part of the portfolio in a different way too,” said Savatierra, adding that platforms will play a key role in the future. “Luma, Halo, Simon, any of them, they are aiming in that direction.”

When considering wholesalers, the one thing Citi always look for is the metric, the measure, according to Zhang. “In certain channels we may not even need a wholesaler anymore but in other channels wholesalers would complement the platform, to deliver the human touch,” said Zhang.

Part of the success of the long-term distribution network within Merrill Lynch has been exactly that, “the human touch”, agreed Salvatierra.

“Whether it is wholesaling or distributing I think nothing can replace the good old handshake,” he concluded.