There has been considerable comment in the trade press recently on the competence of broker consulta...
There has been considerable comment in the trade press recently on the competence of broker consultants. Nevertheless, there can be little doubt that good intermediary sales consultants are highly sought after by Life Offices and Investment Houses and are seen as a key element in their distribution strategy for the IFA market.
As Life Offices and product providers alike try to control their distribution costs in a 'one per cent world' we have seen an increase in the number of telephone-based broker consultants and a slow reduction in the number of field-based staff.
They are tending to focus their field-based consultants (who are expensive resources) on key IFAs where they can make a substantial difference.
While terms such as broker consultant, account manager and business development manager are interchangeable, there is no doubt this unique band of people can be well rewarded if they hit their sales targets.
As a general rule, intermediary sales consultants tend to be young.
Many join Life Offices from university as graduate trainees and it is not atypical for that individual to spend around two years in a Life company head office or as sales support in a branch while undergoing broker consultant training, eventually going out on the road in their mid to late 20s.
They have exceptional earnings potential. Mean total earnings vary between £46,210 and £75,440 with 4% earning in excess of £100,000 pa.
A relatively short career life is exchanged for very high sales productivity or growth.
It is important for them to achieve high salaries before hitting their peak at around 35 years of age.
Essentially, it is a sales role. The broker consultant's role is to make it easy for IFAs to do business with his or her Life Office or Investment House.
The difference in production for a good and bad consultant can be considerable with some bringing in several million pounds of annual premium income or tens of millions of pounds of single premium income.
The secrets of success seem to be the ability to build rapport, a good technical knowledge and strong time management skills, as it is necessary to juggle tasks and deliverables to keep IFAs and consultancies happy. The life span of a typical consultant is short with most having left the profession by the time he or she is 40.
Traditionally, a few consultants will move up through line management within a typical large company hierarchy. However, the introduction of flatter structures and more streamlined sales forces means this option is becoming increasingly rare.
As a result, many are choosing not to pursue the traditional career route but to become specialists in the investment or pensions field.
In the short term we can expect to see a further decline in the number of field based intermediary sales staff and an equivalent increase in telephone-based staff.
It is also evident that basic salaries will increase as offices attempt to reduce total earnings; at least one Life Office has recently stated publicly that it has increased basic salaries in exchange for a reduction in bonus potential.
Nevertheless, the demand for top quality broker consultants who can build relationships quickly, master the technical requirements of the role and generate significant premium income for his or her office remains as strong as ever so we expect the trend towards high earnings and short career life spans to continue.
Investment houses like to cherry pick top broker consultants from the traditional life offices in their early to mid thirties.
The key attributes they seek are a good sales track record, existing high-level relationships in the territory and technical expertise with G60 or a recognised investment qualification desirable though not essential. Inevitably the working knowledge of investment is a pre-requisite.
As Investment Houses like to recruit the best, they are usually willing to pay substantially higher basic salaries than the major Life offices (typically £35-45,000).
Although total earnings often do not exceed those which a good consultant can earn at a Life Office, many prefer the prestige of working for an Investment House and enjoy the new challenge of working with specialist investment IFAs and discretionary portfolio managers in retail sales or the big pensions consultancies in institutional sales.
For those with the right attributes, opportunities with Investment Houses are rife.
With the growth in Multi Fund Links (used by traditional Life Offices to supplement their own funds), Investment Houses are keen to utilise the experience and skills of top-level broker consultants and managers.
The increase in specialist boutiques also creates opportunities for sales specialists who are at the top of their game to grow with the company.
Senior roles often require individuals with experience in investment product negotiations at board level, an understanding of Life Office structure and politics as well as a strong track record in intermediary sales. In these cases, age will be less of a barrier.
Life Offices that are attempting to control costs by reducing potential earnings, run the risk of losing their best sales staff to other offices, Specialist Investment Houses and new entrants to the market.
Despite reports of the demise of the broker consultant, the young ambitious sales consultant or account manager with a good sales history and strong relationships will still find his or her skills to be much in demand as Investment Houses continue to hunt for the elite few that make a significant difference to the company's bottom line.
Paul Harper is managing director of Paul Harper Search & Selection
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