The comment follows last week’s announcement that Avamore Capital was scrapping its BDM model and changing the way it originates loans.

The lender revealed that its relationship managers would originate, underwrite, execute and asset manage each transaction from start to finish.

This has led some industry professionals to question whether the traditional, more sales-type role of the BDM will change, with possibly more lenders changing its approach to origination.

Why do lenders have BDMs?

BDMs are usually field based with a key role to build and reinforce relationships with introducers and give them the support they need to understand a lender’s products, services and lending criteria.

“…The role of the BDM remains a pivotal part of our business,” said Paul Riddell, head of marketing and communications at Lendy.

“Bridging is ultimately a ‘people business’ and customers do business with people they trust.”

Generally, the model sees BDMs originate the loan and then pass it on to the lender’s underwriting team.

“Our BDMs are able to handle most complex cases, however, if necessary, a member of the underwriting team can get involved pretty much from the outset,” said Jon Salisbury, managing director at Ortus Secured Finance.

BDMs usually attend industry events to attract business

Why might the BDM model change?

Michael Dean, principal at Avamore Capital, said its decision to move away from the BDM model followed numerous discussions with the market.

“We feel a number of smaller boutique lenders would suit ‘cradle-to-grave’ origination methods and would not be surprised to see more of that in the future.”

Damien Druce, director and head of intermediary sales at Assetz Capital, added: “It is a real possibility that other bridging lenders could follow Avamore and scrap BDM models.

“Field-based personnel are a costly resource, so it’s only natural for lenders to review their existing models in order to identify more streamlined and cost-effective ways of distribution.”

Damien added that there were no plans at Assetz Capital to change its approach, which sees the lender operate a network of relationship directors who deal with a case from start to finish.

Simon Chapman, relationship director at Amicus Property Finance added: “At Amicus, we have never followed a traditional BDM approach; instead we have promoted the value of having all stakeholders closely engaged in the process and with a relationship manager to manage the process from enquiry/application, through underwriting and to work with our brokers and clients to ensure the post completion is equally seamless.”

Jack Coombs, director at Aspen Bridging, added: “Upon launching Aspen Bridging, we determined to maintain direct relationships between decision makers and brokers.

“Cutting out an additional person helps [to] make the deal process faster and more efficient.”

Market Financial Solutions (MFS) – which doesn’t have a BDM model – sees brokers go directly to its underwriting team.

Paresh Raja, CEO at MFS, felt a multi-layered structure with BDMs and a multi-tiered management system led to slower responses.

“For an effective team model, it’s imperative to have a simple structure with engaged underwriting managers working collaboratively to expedite the whole process.

“Also, having direct access to the credit committee can bring confidence to the broker that this case is [a] priority and deals can be converted.

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“Decision-making process is faster, managing solutions to complex deals can be dealt with much quicker and all these factors help to increase conversion rates.”

‘I would be surprised if we saw wholesale changes’

Gavin Diamond, commercial director for bridging at United Trust Bank, explained that it considered its BDMs to be relationship managers and not case handlers.

“We’ve also built an experienced internal sales team to support their efforts and provide introducers with a consistently high level of service by being available to discuss new enquiries and issue terms.

“This allows our BDMs to spend more time with their brokers, safe in the knowledge that their cases are being well looked after by the dedicated internal sales and underwriting teams back at base.”

D’mitri Zaprzala, head of sales at Octopus Property, felt that the way a lender interacted with its brokers would depend on the type of business it was.

“I would be surprised if we saw wholesale changes to the tried-and-tested BDM model, but what is expected of the BDMs will continue to evolve.

“It’s of paramount importance that brokers know they can speak to people at lenders who can deal with their queries with authority and speed, thereby adding genuine value to them and their clients.

“We took the decision a number of years ago to bring in experts in specialist areas such as commercial and development finance as well as having a team of dedicated internal and external BDMs.”

D’mitri said its brokers liked this approach as it allowed its BDMs to make decisions and not just push products, making them the “first line of loan underwriters”.

So, what do brokers prefer?

BDMs might present at broker workshops to educate on product offerings

“Avamore – the company leading the topic – [is] a small family office [which] can and should develop [its] own business and be involved in every aspect, every stage,” explained Stephen Burns of Adapt Finance.

“For small lenders who grow – or obviously the larger organisations – a BDM role is something which needs great thought, as they are often the face of the company; poorly presented introductions mean they’ll never see any new business and they often wonder why.”

Jo Breeden, managing director of Crystal Specialist Finance, said it constantly liaised with brokers and its supply chain partners to ensure the process remained slick and pertinent, which meant separate BDMs and underwriters.

“Throughout our internal processes, we expect every person to be able to supply accurate and consistent communication, whether a BDM or an underwriter or another person in the chain looking to add value and deliver a successful outcome for the client.”

However, Rob Jupp, CEO of distributor Brightstar, said it dismantled its field based BDM team early last year.

“Feedback we received from our clients was that they simply preferred to speak to specialists at our Billericay Hub and the knowledge of the BDM team wasn’t sufficiently strong enough to grow our relationships.

“It was a huge leap of faith and I was nervous that it was a very risky strategy, but our 2017 business volumes continued to grow without a BDM team throughout the year.

“I was able to reallocate the £300,000 a year saving to enhance our client journey with significant upgrades on a number of fronts.”

With regards to lender BDMs, Rob added: “I note BDMs at Brightstar every day of the week and some days we can have as many as 10 within our seven businesses.

“I would add that some are extremely effective, but many seem to think that cakes and a smile will win them business, which – simply put – they won’t.”