The salary boom for intermediary BDMs

New investment products and financial advisers’ growing usage of managed accounts have driven salary increases for intermediary business development managers (BDMs) over the past 12 months.

According to RIVA Recruitment, BDMs have been enjoying higher salaries and bonuses due to the shortage of these skilled professionals alongside new investment products hitting the market.

In particular, managed accounts, passive funds, private equity and private credit markets have pushed strong inflows which are leading to increased bonuses for BDMs operating in these asset classes.

Andrew Martin, head of asset management at MA Financial, recently described private credit as the “asset class of 2023”. The best opportunities in private credit over 2024 will likely be in areas where banks have exited for structural or regulatory reasons, he said.

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“Over the previous 12 months, we have continued to see BDMs’ salaries increase, especially in the intermediary/wholesale channel. Furthermore, given the headwinds in the institutional market, we continue to see multiple institutional BDMs seek a pivot to wholesale distribution,” wrote Fabian Ruggieri, director of RIVA Recruitment.

The firm’s salary guide found that in the retail/intermediary division, regional sales managers and senior BDMs’ salaries have risen from $200,000 to $300,000 in 2023 to $220,000 to $300,000 in 2024.

Standard BDMs’ salaries have also grown from $160,000 to $200,000 last year to $170,000 to $220,000 this year. For junior BDMs in the intermediary space, their salaries have increased from $120,000 to $160,000 in 2023 to $130,000 to $170,000 in 2024.

RIVA Recruitment also found the majority of BDMs have received a bonus of between 30 per cent to 70 per cent of their base salary over the last 12 months. Top performers have enjoyed bonuses of over 90 per cent.

Moreover, the firm highlighted that as usage of managed accounts continues to grow, so has the growth of asset consultants who now have greater control over advisers’ allocation of client capital.

Research by Investment Trends and SPDR recently found the proportion of advisers using managed accounts has tripled from 18 per cent a decade ago to 56 per cent now. A further 19 per cent of advisers said they are “potential users” of the vehicle, meaning three-quarters of advisers could be using them in the future.

“With the number of financial advisers in Australia reducing by ~35 per cent to ~15,000, and more advisers engaging in asset consultants, there are fewer clients for retail BDM to target.”

Interestingly, research from Business Health last month discovered that BDMs say they are stretched too thin and being asked to service too many advisers each, which is limiting their ability to add true value.

Some 43 per cent said they have seen their workload increase between 10 per cent and 25 per cent in the past year, and 24 per cent said it has increased by more than 25 per cent. As a result, 69 per cent said their satisfaction levels have decreased significantly or marginally over the period.

This is partly due to the number of advisers they are working with as 40 per cent said they work with between 101 and 200 advisers, and 43 per cent reported to be servicing more than 200 advisers.