BDMs Do Influence Product Placement

The results of our latest poll show that when it comes to placing business with an insurance provider, BDMs can make a difference.

To date, 29% of respondents said they would definitely reconsider where to place their clients’ insurance if their favourite BDM were to leave their current employer. In direct contrast, 38% of respondents believe their relationship with a BDM has no bearing on the decision making process.

The remaining 34% of advisers are less certain, admitting that if their favourite BDM were to switch insurers, they would consider shifting their allegiance.

A key component of this debate is the perceived value that a BDM brings to the adviser’s business. Where traditional role descriptions would indicate that this value is delivered through increased sales for the adviser, could it be that risk specialists place a greater value on other elements of a BDM’s service proposition?

According to one reader, an insurance BDM can bring significant value to an adviser by ‘going in to bat’ for them in tricky client situations…

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…

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

I have seen an FSP turn on advisers and make claims difficult (no BDM influence)…

This response also raises the question of what is in the best interests of the client. Certainly, a strong consideration for any risk writer is that the client is placed in the best position to be paid a claim, in the event that they suffer an illness or injury. But if a BDM can influence an insurer’s decision to pay a claim, is this a more important factor for the adviser to consider than the quality of product definitions or the speed at which a claim is paid? Similarly, if a BDM can help an adviser achieve more favourable terms through underwriting, is this better for the client than automatic acceptance and immediate cover offered via an e-application service?

Likewise, this assumes that BDMs and advisers are similarly motivated to achieve the best outcome for the client. However, a primary component of most BDMs’ remuneration package is a volume bonus based on how much business is written with the company. If bonuses are driving a BDM’s behaviour, does this create an automatic conflict of interest for the adviser? And how loyal will that BDM be to their employer – will they jump to another provider if a big enough cheque is offered?

We look forward to hearing more from both advisers and BDMs on this topic, as our poll remains open for another week.