BDMs off to boot camp

According to recent research undertaken by Prescience Consulting, business development managers (BDMs) are not doing a good job and furthermore, the bar has to be lifted in terms of the provision of service standards offered to financial planners.

BDMs have often been labelled by financial planners as mere brochure delivery men on the basis that they have not been able to offer real value to planners from whom they hope to gain business.

This is far from a recent criticism and dates back to the mid to late 1980s when the first generation of BDMs as we know them emerged.

In the 1980s and 1990s, the financial services market was a lot less sophisticated than it is today. In the early 1990s, the concept of blending portfolios and supplying financial planners with the most rudimentary tools to use for the benefit of educating their clients was perceived as a real value-add.

Today, most BDM teams are offering, or have used, sophisticated blending software that is now freely available to financial planners.

But introducing value-add tools in their own right is a relatively small part of what BDMs today are expected to bring to the table.

Distribution managers have to draw the line somewhere, otherwise BDMs would all end up spending an inordinate amount of time on practice management issues alone.

After all, a BDM’s raison d’etre is to sell product, platform or dealer services. On that note, many BDMs do not seem to like being referred to as ‘salespeople’ but call them what you will, at the end of the day that is what they are.

Peter Thornhill, who was one time national sales manager atPerpetual Funds Management, head of sales at Potter Warburg and prior to that was with Hendersons in the United Kingdom, once said that financial planners expect BDMs to come into their offices, position the product with them and ask them for their business.

“Never shy away from the fact that you are in sales,” he said, “because in the end that is what we do and we should always aim to sell in the most professional way possible.”

Maybe there is some confusion in the ranks of BDMs about what the role actually entails these days.

There are some very professional BDMs who are highly intelligent, know exactly what the role requires and can actually put relevant value-add ideas in front of financial planners.

But, generally speaking, there is definitely some work to be done in raising the standards throughout the BDM ranks.

Additionally, there is a significant number of young BDMs who, with proper mentoring, should prove to be very effective in their roles.

BDMs have, in the past, been reliant on their bosses to mentor them and give them clear guidance on how to become more professional in the way they operate in the adviser market.

The ability of senior BDMs and state managers to deliver guidance to their teams has often been questionable, as they themselves have solely relied in the past on their superiors as role models and fashioned their approach to business development on them.

While there are undoubtedly some senior managers who have taken on board the mentoring function with great focus and have instilled in their staff some valuable business development and management skills, there has been to date no systematic approach to putting in place robust development programs.

We are now seeing the emergence of consultancies that are specialising in distribution and sales management programs. These programs are either specifically designed to work with managers to help in the training of their teams or alternatively, are focused on providing sales managers with the requisite tools to manage a team of BDMs.

Each of these consultancies has principals who have held senior distribution management positions and have therefore come with well-constructed business models, but have the benefit of knowing that the services that they now offer have real world legitimacy.

Former director of distribution atSagitta, John Tuxworth, has established PeopleFirst. He and his team work with key members of the client organisation to help build a strong sense of purpose within the client organisation, by engaging key people in the clarification of strategy, direction and values.

While the work of PeopleFirst is not focused solely on developing sales teams, it is an area in which the consultants have first-hand knowledge and can add significant value.

“We start with the people in the organisation facilitating the creation of the culture and the capabilities needed to execute the strategy — and to sustain peak performance,” Tuxworth says.

“It is about focusing on these key drivers of peak performance, addressing strategy, culture and effective execution. You get this right and your organisational performance will rise accordingly.”

Prescience Consulting, headed up by former Perpetual heavyweight Wayne Wilson, recently launched its training company Jacana Business. The specific aim of the company is to facilitate the professional development of BDMs.

According to Wilson, Jacana’s approach is to provide two basic program models.

“The first gives an organisation an exclusive program to train their BDMs with Jacana, continuing professional development to the team,” he says.

“This approach allows an organisation to specify aspects of their BDMs’ role they wish to emphasise. The second offers individual programs to which any organisation can send BDMs — in particular, those new to the organisation or industry.”

Additionally, Jacana provides mentoring for BDMs designed to give participants ongoing support in their roles.

Meanwhile, Wayne Kedward and Les Clayton, former senior executives atING, have established Pioneer Business Services, which has designed a sales training program for managers.

While we are at an early stage regarding appropriate external training for BDMs, there is no doubting a role exists for relevant, properly constructed programs that are taken on board by fund managers and dealers in the development of their BDM teams.

Additionally, the work being done by the consultants in the industry will go a long way in focusing distribution management on how to assist team members to achieve peak performance and prepare them to take on more senior roles over time.

The flow on effect is that financial planners should receive the service level they require and the position of BDM seen as one to be sought out by those seeking to work in a professional environment where there is a legitimate professional career path.

Peter Dawson is executive director of theFinancial Recruitment Group .