Which business development managers do you regard as trusted business advisers and which ones are simply target-carrying mouth-pieces for the provider’s marketing messages?
How many BDMs understand what it is like to be an entrepreneurial business owner?
How many genuinely understand your business model, priorities, aspirations and concerns? How many possess the business acumen and consulting skills to make a significant difference to your business?
Phil Pilgrim, the founder of a fee-based advice business in Australia (and one of my key business partners in our ‘Clients for Life’ programme), speaks openly of how this has already played out Downunder.
“Of the swarms of BDMs that would get into my diary, perhaps two out of 10 provided me with any real value; and this was never product information. The ones I would see again were those who were able to provide me with real insight to help me improve my business.”
For the days of product-centric, transaction selling are over.
In the good old days, sales directors could rely on large expense budgets and charismatic sales people to attract business from financial advisers. But today’s advisers and wealth managers are demanding a different type of relationship with their providers; the transactional, “always be closing” sales approach needs to be replaced with a consultative style of strategic account management.
Today’s BDMs need to be revenue-generating business consultants and consummate relationship managers. But most important of all, they need to realise that it is the adviser’s business that they are being paid to develop.
The providers who will succeed will be the ones who focus on helping advisers to build highly successful businesses.
Financial services providers (platforms, fund managers, life companies, …) need to be clear about the value they add to advisers and wealth managers, and they must redefine the way they interact with these key intermediary customers – because their future success is tied inextricably to the success of the advisers they serve.
Here are some of the questions providers need to ask themselves:
- Why should an adviser choose your platform?
- Why should an adviser select your platform as their primary platform?
- What is special about your Sipp, Isa, bond wrappers?
- Why should a wealth manager select your investment solutions? What value do you add to advice businesses?
- What makes you stand out from the dozens of platforms / lifecos and the hundreds of fund managers vying for the same business?
- And most importantly … “What can I do to help my customers make their businesses even more successful?”
Prior to 2013, life companies and, to some extent, platforms, held the upper-hand in the relationship with the adviser simply due to the fact that most advisers were physically paid by the product provider.
Now that the client pays the adviser and the adviser controls the destination of client investments, the relationship has been turned on its head.
The removal of commission and the banning of fund manager platform rebates have put advisers and wealth managers firmly in control. Today’s new breed of sales person needs to fully understand what it is like to be an adviser or wealth manager; the challenges, concerns and opportunities of owning and running an advice business.
They need to know how to drive value in an advice business. They need to understand what it is like to be an entrepreneur. They need to know the value they can add to their clients’ businesses and how they can help their clients build ever-more-successful enterprises. And then they need to do it. This requires a completely new approach.
An increasing number of providers have woken up to this fact and many have cut their ‘Old School’ sales forces in half. Now several are embarking on full scale sales transformation programmes to equip their remaining BDMs with new skills, attitudes and tools.
Because in this new world where products are commodities, platforms are utilities and almost every provider owns one, people are the key differentiator.
They need to ask themselves how well do their BDMs measure up? Are they among the 20 per cent who you look forward to seeing again, or are they among the 80 per cent who are unlikely to get a second meeting?
Campbell Macpherson is managing director of Campbell Macpherson & Associates Ltd. He has held executive roles in Zurich, Openwork and Sesame