Business Development Managers are paid at lower levels than many believe and are expected to perform multiple roles, leading many to contemplate a change of employer or even a change of career.
At the same time, BDMs and Practice Development Managers (PDMs) are also being tasked with overseeing compliance and engage in recruiting, alongside their normal work according to practice management group, Business Health.
In the second research project of its kind, Business Health stated it has researched the BDM and PDM market for the second time since 2013 and found that while the average development manager worked 52 hours a week, more than 57% per cent were working more hours than in 2014 and were not being paid accordingly.
Business Health, Principal, Rod Bertino said only 26% of development managers surveyed reported an increase in base salary with 41% less satisfied compared to 12 months ago. He said as a result of this there was the real possibility of burn out among development managers and pointed to growing list of tasks required of BDMs and PDMs.
According to the research conducted by Business Health and presented in a whitepaper titled Business Ready II, around 80% or more of development managers stated they delivered business and strategic planning, business coaching and sales and marketing assistance.
Yet, 46% reported they were also required to monitor compliance, with 39% reporting they had to provide advice on the creation of Statements of Advice, while 61% reported they were also responsible for recruiting, even though most stated they spend less than a quarter of their time doing so.
Half of the surveyed BDMs and PDMs said a quarter of their time was spent on general administration issues with Bertino stating organisations would be better served using administration staff to service many of these areas instead of BDMs and PDMs who were too highly paid for low level work.
However, Bertino also stated that development managers received lower pay than expected with around half on a base salary of $100,000 to $150,000 and only 7% earning more than $200,000.
Despite this, most were expected to service anywhere from 21 to 100 advisers with 36% reporting they serviced 21 to 50 advisers and a further 31% servicing a panel of 51-100 advisers, with 18% servicing a panel of more than 200 advisers.
Collectively, Bertino said these factors were creating key person dependency risk with 78% believing they would move employers in the next three years and 50% of development managers having been approached in the last year by a competitor.
He said the implications of these potential moves impacted the relationship with an adviser – who could be recruited to another licensee via the development manager relationship, as well as the loss of corporate history and experience.
The survey conducted by Business Health covered 74 BDMs and PDMs employed by product providers, licensees aligned to an institution and non-aligned licensees, with names drawn from about 500 development manager contacts held by the group.
Pressured to perform more for less…$100,000 to $150,000 base salary (plus car, super & expense account in most cases) for 66% of BDMs to service less than 100 clients? And a quarter reported base salary increases? My heart bleeds. And for all the advisers here, hands up if you work less than 50 hours per week?
I’m not anti-BDM AT ALL, but if BDMs aren’t helping with admin issues that require escalation, product-specific wording for SOA’s, product updates, and general enquiries, what are they doing? When was the last time your BDM offered you ‘strategic planning, business coaching, or marketing assistance’?
BDMs – really, if Insurance companies had their sh*t together there would be no need to sort out admin issues. Product enhancements can be done online. I would not be taking anything from a BDM to do with compliance (SOA wording). None of them provide any strategic planning at all. Should advisers really be persuaded to use a certain product by a BDM from a product provider? Is this a conflict of interest? Anyway I dont see much value they provide….
Like Josh below, I’m not anti-BDM but my typical visit from a BDM consists of 40 minutes of chit chat and 10 minutes of information I either already knew or could have read from an email in 2 minutes. Some BDM’s are great if you need a problem sorted out. Others can’t even get this bit right.
BDM’s cannot moan about servicing up to 100 advisers in this way and earning these levels of pay. Most advisers have to service considerably more clients and earn considerably less.
And of course with the LIF we are going to see our incomes slashed by up to 50%.
The insurance companies have seen to it that relationships with advisers in the future will never be the same again and the trust has gone. Advisers are just not going to be putting up with time wasting in the future.
You can’t help but be cynical with the timing of all of these sudden reports on the value of BDM’s. The FSC have managed to slash a big expense in adviser commissions and are probably now looking to start slashing other high expenses (High BDM pay??)
What should also be getting published is the salaries and bonuses paid to your average Insurance company executive. There would be an outcry but I am sure this will be the last major expense the execs want to look at.
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