My first Section 401(k) plan sale came as a referral from an accounting firm. The broker who sold the plan disappeared, never visiting the company again. The company had a retirement plan, but received no employee education or professional advice for four years. By the time I got there, they were frustrated.
I've managed this plan for more than two years. In that time, employee participation has increased from 46% to 96%. Total assets in the plan have gone up almost 500%.
How did I achieve these things?
I provided the service for which they'd been waiting and which they deserved.
I visited at least every six months, and spoke to both the sponsor and the employees, educating them about selecting investments, diversifying, rebalancing, and striving to stay ahead of the investment curve.
I was not going to sell a plan, then walk out the door and simply expect my check every quarter.
I run across companies all the time in which the broker who sold the plan never came back.
Be an Expert -- Not a Salesperson.
Producers who are not specialists in the retirement planning business have difficulty keeping up with the many plan design options, ERISA requirements, IRS regulations, and so on.
I began to focus on retirement planning a few years ago. Now, it is almost all I do. I have placed 24 plans with assets near $30 million.
Many people rely on my expertise to get them where they want to be, whether it's preparing for retirement or saving for their children's future. Regardless of the dollar amount, this money is important to them, and I try to treat it with the same care as if it were mine.
I realize that I'm in sales, but I don't think of myself as a salesperson. I'm a solutions provider, and I give my clients an objective approach to their retirement plans.
The firm at which I work has no in-house product, so I'm not captive to any product. I work with many retirement plan providers, and I know most of the products available to the market. I believe that most prospects and clients find this approach reassuring. When I visit, they like knowing that I don't have an in-house product to push.
Building My Business
I prospect the old fashioned way, by making cold calls. There still are many excellent sources from which to develop call lists.
My initial approach is simple. I tell the prospect that I work for a firm that takes an independent approach, and that I'm curious about the last time an agent took an independent approach to their Section 401(k) plan.
I use the same approach with both start-up and takeover plans. I ask questions like:
o What are the concerns here?
o How is employee retention?
o Is the company recruiting?
o What are the tax benefits for the employer?
In my initial meeting with the plan sponsors or trustees, I discuss five key topics:
1. Plan administration and service.
2. Plan design.
3. Employee communication.
4. Investment performance and financial advice.
5. Employee participation.
Pick the Appropriate Plan.
Some plans offer helpful Web sites, some have excellent enrollment materials, some use good funds. A mix of all five elements above is necessary or the company will want to change providers later. If there's room for improvement in a plan, I will find it.
Work with Plan Providers Who Will Be Partners.
I work only with providers who are specialists in this business. Plan providers who specialize in retirement plans offer customized plan design, top-notch plan administration, up-to-date employee education, and great investment options. All of these add up to strong employee participation.
I want to be sure I have a good relationship with the plan provider and that it will work in partnership with me. Transitioning from one provider to another often is troublesome for my clients, so providers must show me a strong desire to assist the plan sponsors.
I like providers who are clear about fees, fiduciary responsibilities, and sponsor services, and who provide ongoing communication with dedicated service representatives. The providers with whom I work have certified enrollers that visit the employees. I consider this an important first step in providing clients great service.
After the Sale, Service Is Everything.
I monitor the participation rates of the plans I service. If any plan has less than 70% participation, I act to remedy that. I know my plans can do better. I revisit the plan with the client to see what improvements we can make.
I visit each client company at least every six months. These meetings give me an opportunity to sit down and talk with the employees and let them know I'm always there for them when they have questions. I refuse to lose a plan by not servicing it.
My clients trust me to give them guidance and keep them up to date. For instance, my plan's employees are greatly concerned by the recent mutual fund scrutiny. They may read about it and hear about it, but many do not understand it completely. I don't believe that's their job -- it's my job to understand it and help them understand it.
My firm takes a different approach in investing money for clients. Some firms use the "buy and hold" strategy. We refer to that as the "buy and ignore" strategy. We use a consistent philosophy and a discipline to help manage risks for clients. I use the same approach to help my clients manage their Section 401(k) plan assets.
Help Clients with Their Fiduciary Responsibilities.
Plan sponsors today are concerned about their fiduciary responsibilities. They are concerned about having enough fund choices (but not too many to manage), offering advice, and providing participant education. A good plan provider offers products and services that address all of these concerns. I look seriously at my clients' plans every year to make sure that those companies are fulfilling their fiduciary responsibilities.
Being an Expert Brings Great Results.
When prospecting for new business, I often find myself competing against other brokers. It's important that I know my competitors' products and services. It is equally important that I know the needs and concerns of the company for which I am working. That's the only way I'll know why my recommendation is better -- and the only way I'll close the sale.
I love what I do in this business. In 12 years, I feel the best I ever have about what I'm doing and where I'm headed.
