The exchange-traded fund (ETF) market continues to grow, evolving rapidly in various regions worldwide, with Europe standing as a significant battleground. As firms venture into ETFs, building an effective ETF sales team becomes critical. The success of such teams depends on a mixture of strategic market entry, hiring the right talent, aligning compensation models, and structuring the team to adapt to evolving market demands. Here’s how firms can approach building a robust and successful ETF sales team.

Phased Market Entry

Entering the ETF market requires a phased approach, particularly when introducing new products. Planning should start six months before product launches, allowing for hiring, training, and the gradual development of the sales team. Firms should focus on key European markets, each with distinct characteristics and maturity levels.

Understanding the distinct market needs is crucial for tailoring the sales approach. Firms should avoid a one-size-fits-all model, instead adapting strategies to each region’s specific product demands and market maturity.

Hiring the Right Talent

Hiring the right talent is perhaps the most critical component of building an ETF sales team. Gone are the days of hiring inexperienced, young professionals to make cold calls. The competitive nature of the ETF market demands seasoned professionals who not only understand the intricacies of ETFs but also possess strong relationships within the financial industry.

For a successful market entry, firms should focus on hiring experienced VPs or professionals looking to step up in seniority. Experienced professionals bring with them industry knowledge and established client relationships, allowing them to hit the ground running. This is especially important in highly competitive markets like Germany and France, where established brands dominate, and firms face domestic bias.

In contrast, more entrepreneurial markets like the Nordics, Switzerland, and Italy offer different dynamics. The right salesperson with local knowledge and strong relationships can help penetrate these markets more effectively. Italy, for example, is a relationship-driven market where clients often prefer partnerships, making local expertise crucial.

Structuring the Sales Team

A well-structured sales team can make all the difference in a firm’s success. The structure should balance the need for ETF specialists with generalist salespeople who have broad product knowledge across mutual funds, active investments, and ETFs. A hybrid model works best, where ETF specialists are embedded within generalist sales teams, allowing for flexibility without sacrificing expertise.

ETF specialists should have the autonomy to cover specific accounts, while also working collaboratively with the broader sales team. Coordination is essential to avoid internal competition and territorial disputes over clients. Leadership needs to facilitate this collaboration by ensuring that roles are clearly defined and conflicts are managed.

For instance, a generalist salesperson covering multiple products may only spend a fraction of their time on ETFs. However, they need to be educated enough to cross-sell ETFs effectively while leaning on the specialist when necessary. This hybrid model ensures that clients receive a holistic service without compromising the depth of ETF expertise required to compete in the market.

Adapting to Active ETFs

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