Normally this suggest some configuration issue around LDAP search or LDAP User DN Lookup. You can check if the user directory receive the request sent out from policy server (ie: LDAP access log). Did you provide Administrator Credentials? Some user store might need the client to have administrator credentials in order to connect.
After click on View Contents, you need to fill in Search Typy (ie: Attribute-value), did you provide the correct attribute (ie; uid) and value (ie: *). Did you test with other user directory? This can help to isolate if this happen to particular user directory or all user directories in your environment.
We don't configure user directory In sm management console. How you test the connection?