How Influential Are BDMs?

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If your favourite BDM moved to another insurer, would this influence your decision about where to place your clients’ insurance?
  • Possibly (37%)
  • Not at all (34%)
  • Definitely (29%)

Business Development Managers are often given a bad rap by advisers, with some seen as merely providing a brochure delivery service. But if an adviser has a strong relationship with a BDM, which delivers real results for their business, how likely is this to influence the adviser’s behaviour?

In a market where insurance products are extremely competitive, to what extent do advisers make their decision about where to place their clients’ insurance business based on the relationship they have with the company’s BDM team?

New research from Investment Trends would suggest this may be the case. The study found that good support is the top selection driver for becoming a planner’s most-used insurer. This is compounded by the fact that advisers are placing an increasing amount of business with their top insurer (see: Advisers Trending Towards Single Insurance Provider).

“Satisfaction is crucial in the insurance space, as business is not very sticky and planners can easily stop writing new business on an insurance provider. That’s why there is a very strong relationship between satisfaction and switching behaviour,” said Recep Peker, Senior Analyst at Investment Trends.

“Good BDM support is a hygiene factor, crucial for both retention and acquisition. Poor support is a key factor that has caused planners to stop using an insurance provider…”

A similar trend was identified by Business Health earlier this year, as part of its research into the role of the BDM.

‘The importance of the primary adviser relationship for any organisation can never be underestimated. In most cases, the main custodian of the relationship is the BDM,’ Business Health said in its report.

With three-quarters of BDMs saying they expected to be in a different role within the next three years, Business Health speculated that this posed a high degree of ‘manager dependency risk’ to product providers.

It should be noted, however, that both pieces of research were conducted prior to the commencement of the Future of Financial Advice (FoFA) reforms, including the new best interests duty. While the duty does not require the adviser to review all available products in the market before recommending a solution for their client, the ASIC has previously advised it will be watching for insurance switching which delivers no benefit to the client.

We are keen for your thoughts on this tricky issue…

 



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6 COMMENTS

  1. Well, we’ve had some good ones, but I can’t say that many, if not any, have added to our bottom line.

    I don’t want to be a BDM-basher but they are hard ot get hold of when you need them. Some don’t even return calls. They have a challenging job and most want to helpful, but if we didn’t have them we probably wouldn’t suffer too much as advisers.

  3. Interesting I do not believe this survey at all.

    Colin Morgan says its all about relationships, and he is correct, if you have a meaningful relationship with a BDM they can make all the difference. You can get anything done

    For example I know a certain FSP is not at all interested in helping advisers unless they have a relationship with them.

    Your BDM can make a difference.

    A relationship with the Insurer (BDM) is more important than the definitions, if you don’t get paid at time of claim then what’s the point. You can have all the definitions you want but all the insured wants is to be paid.

    ASIC do not agree but I would like to see a policy maker from ASIC put in a claim and have it declined by the Insurer and FOS.

    I have seen FSP pay claims that were non disclosure ( BDM influence )

    I have seen a FSP turn on advisers and make claims difficult. (No BDM influence)

    (Serious are the people who answered this risk writers).

  4. How exactly could this survey have any merit?
    Us humans are terrible at self reporting what we are infuenced by.

    BDM’s and advisers have conflicting objectives and it’s very hard for them to strike the right balanace.
    Ultimately they just need you to use their product. Some see the best way to get this to happen is by providing tangible value.

  6. I feel having a relationship with a BDM is valuable to our business to a certain degree – but it is certainly not the main reason we place business with certain insurance providers. These days BDM’s only want a relationship with a practice/advisor that continues to write high volumes of business with that particular company. They get their volume bonuses from the amount of business that is written by their panel of advisors. It is about time these bonuses are put under scrutiny.
    We use many insurance companies for our clients insurance as we are not swayed by any BDM’s to just use their products. This is in the best interest of the clients after all.

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