How to prospect for new retirement plan business

Looking to build your retirement planning business but not sure where to find your next client? The best prospective retirement plan clients may be right in front of you – if you think creatively. Here are four rich sources for retirement plan business that are surprisingly easy to cultivate, along with questions to ask to help you start the conversation.

1. Existing clients

Your current private wealth clients know and trust you, but they may not know you help with workplace retirement plans. Once you tell them that’s a part of your business, you might be surprised how many connections are uncovered. They may work for businesses that are looking for help with their plans or, better yet, clients may own or manage businesses themselves and may be looking to provide a retirement plan to employees.

Even clients who do not have direct connections to company retirement plans may be connected to important decision-makers in other companies. Think of yourself as a subject-matter expert who can offer services to busy professionals looking to delegate.

Idea: An employer-sponsored 529 education savings plan may be a good entry point. It costs the business owner nothing, and is often less expensive for the participant than setting up an individual 529 plan. It’s also a distinct and attractive benefit for employers trying to attract younger talent.

Conversation starters:

• Did you know that I also help companies create plans that enable their employees to pursue retirement goals? Can you tell me about your company’s plan? Can I see a copy of your summary plan description?
• If I have a question about your 401(k) plan, whom should I call at your company? And may I mention that you’re my client?
• Do you know of friends or colleagues who could use my services?

2. Personal relationships

We all have family members, friends and acquaintances with retirement plans. Have you ever thought of how many own their own business or have been promoted into the management of a company? Do you typically hear 401(k) complaints from acquaintances as soon as they find out you’re a financial professional? A simple conversation about how you help companies establish and maintain retirement plans may open doors to decision-makers who need your help. It's just getting in the habit of looking at people from different perspectives and wondering where the connections are.

Idea: Every existing retirement plan is required to file Form 5500 annually. Looking through this public information, available through Form 5500 public data providers such as Larkspurdata.com, JudyDiamond.com, efast.dol.gov and BrightScope.com, can help you learn whether an existing retirement plan has room for improvement.

Conversation starters:

• I help companies create plans that enable employees to pursue retirement goals. Can you tell me about your company’s retirement plan?
• How would you rate your company’s retirement plan? Would you like me to find out more about it?

• Who manages your company 401(k)? Would you mind if I call this person and mention that you’re a friend?

3. Centers of influence

Centers of influence are the people or businesses that can help boost your credibility and marketing efforts through referrals and word-of-mouth. Many advisors build their practices on networking. Networking among business professionals — certified public accountants, employment attorneys and mortgage consultants — can be a rich source of referrals for both sides. Add retirement plans to the menu of services and include a third-party administrator (TPA), a payroll company and a benefits broker in the mix and you may be surprised how quickly you can be viewed as the retirement plan specialist.

Idea: TPAs can form a great synergy with financial advisors in terms of helping each other with new retirement plan business. TPAs can also help your retirement plan practice handle the more technical aspects of running a plan. The good news is they typically want to work with advisors who can help them with investment advice, participant education, plan design and plan provisions. Don’t be afraid to reach out; you may find a reciprocally beneficial relationship.

Conversation starters:

• Did you know that helping companies improve their retirement plans is an important part of my practice?
• Do you know of any clients or associates who might be interested in my services?
• If you were in my role, how would you market my services to a business like yours?

4. Everyday contacts

Successful advisors turn everyday encounters into clients. What if you mentioned, when having small talk with a doctor during an office visit, that you specialize in making sure small businesses have the best retirement plans for owners and participants? What if the doctor was really frustrated with his existing 401(k)’s service? Chances are, you’d quickly be the advisor on his plan. These encounters happen more often than we realize.

Idea: Small business owners may be receptive to the benefits (diversification and oversight) of having their personal and retirement accounts managed together.

Conversation starters:

• Does your employer offer a retirement plan? How often are employee education meetings held?
• Can you and your colleagues make Roth contributions?
• Does your company match employee contributions or make profit-sharing contributions to your 401(k) plan?

Take action: Find common drivers of change

Once you have their attention, you may be surprised how often plan decision-makers either don’t have plans or are dissatisfied with their existing plans. Attention most often focuses on these four areas:

Step 1

Investments – Most plan sponsors don’t know how to evaluate funds.  

Questions to ask:

• Do you have a regular process for reviewing and evaluating the investments that you offer?
• Do your participants find it difficult to choose the investments in the plan?
• Do you offer target date funds?

Step 2

Fees – Plan sponsors will see value in helping them compare fees among providers.

Questions to ask:

• Do you believe the plan fees are low for the service you’re getting?
• Do you fully understand all the fees embedded in the plan?
• Are you interested in comparing the cost of your plan to others?

Step 3

Service – Poor service is one of the main reasons sponsors consider changing plans.

Questions to ask:

• On a scale from 1 to 10, how would you rate the level of service that your plan receives?
• What would it take for you to rate your service a perfect 10?

Step 4

Fiduciary liability – Plan sponsors are often not aware of their extensive legal liability.

Questions to ask:

• Are you concerned about your fiduciary liability as a sponsor of a plan?