The Bottom Line:
- Of 650k U.S. advisors, only 10% desire to sell retirement plan business.
- Under 2.5% have more than 5 plans on the books, and that number is shrinking.
On Friday, Feb. 9, the President signed a two-year federal budget law which included the following retirement plan related provisions:
Be the business owner you know you can be.
Build a marketing and sales strategy. If you need a seasoned support structure / coach behind you, hire Acceleration Retirement or a similar firm for a reasonable flat fee to help.
Ensure your marketing plan includes specific strategies and timelines with email marketing, as well as cold calling for the three channels that will send you leads:
- Center of Influence (CPA’s Attorneys, etc.)
- Referrals (Current Clients) and
- General Outbound Marketing (Companies that don’t know you today).
Create a budget in your plan so that at least one person – internally or outsourced person externally – is consistently focused on creating appointments for you to meet with decision makers at least a few times per month.
Chase the right rabbits, not all the rabbits
Don’t use standard 5500 data lists (what all of your competitors are using).
Be intelligent and unique when it comes to your data. Separate yourself from the pack by utilizing data resources like Acceleration Retirement that can not only get you the free and easy plan data, but also deliver 3 contacts (with email addresses) for each company, as well as tell you who the advisor is on the plan and when they are planning on reviewing again.
Create a data model by which to segment the data (Tier 1 – Top 10% / Tier 2 – Next 20% / Tier 3 – Bottom 70%) based on fit and profitability.
If you don’t have the time or internal staff now to use the non-public data, or create a segmentation structure, hire a company to do it for you for a reasonable flat fee.
Stay patient and build a solid pipeline
Don’t freak out after 6-9 months and think about how much money and time you’ve spent, and how little business you’ve brought in. The 401(k) business is among the most profitable “per-hour-of-service” segments in the industry and an excellent springboard for those that are interested in ancillary business that exists once you are in front of 50-100 more people. But the profit comes after a test of endurance, as the sales process is long and requires a great deal of patience.
Stay focused on executing week to week, and keep your eyes on the prize. If you stick to your plan, you should be able to easily bring in 5 new 401k plans and $20M in new assets per year, which means that your profit margin should be positive after 18-20 months of aggressive sales and marketing.