National Mutual Funds: Retail Services Division

I. Problem National Mutual Funds (NMF), founded in the 1940s, is one of the most important mutual fund companies in the brokerage industry in the United States. The company has extended from a mutual fund company to a financial center offering mutual funds, brokerage products including stocks and bonds, insurance products, and a variety of planning tools to help customers save for major life needs. However, since the market downturn, which is hurting many brokerage and mutual fund houses, NMF’s profits and operations have been affected significantly. To respond to the market slowdown, Harry Smallwood, President of NMF Retail Services, has come up with a directive to reorganize the call centers in the Retail Services Division in an effort to grow its asset base. The main issue is how Harry will reorganize the call centers successfully to have a smooth handoff of the selling process between traders and sales representatives without breaking the relationship between the two departments.

II. Alternatives
a) Create retail service teams consisting of traders and sales representatives in order to increase revenues.
b) Train traders to involve themselves in the selling process in order to increase revenues.
c) Lay off some employees in order to cut costs.

III. Analysis of Alternatives
a) Create retail service teams consisting of traders and sales representatives in order to increase revenues.
Since the problem is that trading volume and profit margins are decreasing substantially, it makes sense for both sales representatives and traders to form teams and work together in order to bring more revenues. Each retail service team will consist of traders who are responsible for outbound calls to identify prospects and for helping customers place trades in a variety of investment vehicles, and sales representatives who take care of current and prospective customers in determining the best product mix. In terms of compensation, NMF will assign commission based on