It’s estimated that for every $1 of assets managed for business retirement plans, another $7 in assets are available for the right advisor to capture. No reader will turn down this return formula, but most don’t know how to seize the opportunity.
Find the Right Partner
Business retirement planning is no easy game. As if there is not enough knowledge to consider in your daily operation, adding ERISA to your offering may be enough to pause readers for good. However, just like any profession the right experts do exist. You simply must have the patience to find them or allow a firm like your IMO, custodian, or broker-dealer to discover for you.
A business retirement plan alliance should have the expertise to review existing plans and consult with you and the plan sponsor to craft the optimal company plan. Take a 401(k) for example. Does the plan sponsor truly understand the plan, expenses, investment options, lag, and compliance? Most likely not. Moreover, the existing plan advisor probably isn’t doing much to consult and advise outside of a casual enrollment meeting a couple times per year.
Once you’ve established yourself and your team as experts in the business retirement plan marketplace, the seeds begin to bear fruit. By becoming the educated and trusted professional, key person opportunities begin to blossom. The next logical discussion to take place includes things like buy-sell plans, business overhead, golden handcuff plans, and succession plans.
Once that barrier is crossed, executives, top sales professionals, and firm leadership will begin to ask for your guidance in areas of life insurance, retirement income planning, and investments external to the company retirement plan.
One goal for advisors in the business retirement planning sector is to capture the rollover assets. If you ask most advisors why they enter the space, it’s an investment of their time today for a future pool of retirees and their assets. A built-in referral marketing strategy.
With the right plan sponsor and fiduciary relationship in place, the advisor can become the first referral source given at retirement. This referral coupled with the education and efforts during plan years should give the plan advisor all the credibility needed to earn the rollover.
However, we find most plan advisors significantly discount the true asset pool available. Advisors should consider more extensive marketing of themselves and their services early in the relationship. What the advisor is truly aiming to achieve is all the unknown money associated with the plan participant.
Unidentified assets such as external brokerage accounts, inheritance, and ownership in the small business they started with an old college friend years ago. 82% of rollovers will go to the involved advisor. Will the rest of the assets follow?
Referrals in the business retirement plan market are three-fold.
First, the opportunity for a satisfied plan sponsor to refer the advisor to another business that may be an alliance, client, or other known business in the community.
Second, plan participants of any size realizing the attention they receive and the confidence you deliver pertaining to what’s likely their largest retirement asset. Whether they refer you to another business where they know somebody on the inside, or simply a friend that may have a rollover opportunity people want to work with advisors they believe provide them care and education.
Lastly, recall the earlier writing regarding finding the right partner. Independent firms that provide retirement plan advice are always looking for advisors who understand the space and share the same prudent desires for the plan sponsor and participants.
The Bottom Line
As you self-examine your business expansion, consider small- and medium-sized business retirement plans. You have business owner clients today and know key or connected employees in businesses around your community. You’re marketing to them every day whether you realize it or not.
With the addition of strong alliances that are masters in the sector, this is a simple addition to your business plan. Business retirement plans are considered sticky and will provide opportunity in; executive planning, rollovers and undiscovered assets, and referrals to additional clients and plans.
Get with connected experts today to learn how to turn $1 into $7.
©Surge Business Consulting 2018. All Rights Reserved. The thoughts and opinions expressed herein are those of its authors only. This is not tax or legal advice. This article is for educational purposes only. Sources: MillenniuM, Alliance, Surge Business Consulting, Financial Independence Group. This article shall not be circulated without expressed written permission.