Building and managing a successful and compliant 401k practice takes a considerable amount of time, talent, effort, and resources.
The following 10 strategies have been proven effective at helping you close more 401k plan business.
1. Specialize
The retirement industry is complex. You need to receive specialized training, get at least one retirement credential and present yourself as a 401k specialist, not an investment advisor or Wealth Management firm that also helps people with their company retirement plan.
2. Niche Further
While it may seem like specializing as a 401k advisor is already defining a niche, to the law firm or manufacturing company that has 5 “401k advisors” knocking on their door every week, the 401k advisor that specializes in working with law offices or manufacturing companies becomes a better choice than everyone else that wants to help service their plan. Pick a niche.
3. Understand the Sales Cycle
The 401k plan sales cycle is a long one. It can often take up to 18 months or more to close 401k clients. This makes building a relationship an essential part of prospecting. Your goal in meeting with a plan sponsor is to get the next appointment because the stronger your relationship, the more likely you’ll be at the table when it’s time for the company to finally make that change.
4. Identify Value Drivers
Don’t rush in talking about funds, fees and fiduciary. Chances are, what’s important to you is not going to be keeping your prospects up at night. You need to find out what’s important to your prospects by having more meaningful conversations. Take a look at Jane Murphy’s book, “There’s No Such Thing as Closing the Deal” for a list of questions that create better conversations.
5. Be Helpful, but not Insulting
While it might help you identify gaps that lead to you being able to present and offer solutions, pointing out all of the mistakes a plan sponsor is making is not how you start to build a good relationship. Take caution when going into a new prospect with recommendations. There’s a fine line between pointing out possible improvements and offending the person responsible for the existing plan choices.
6. Have a Follow-up Process
Knowing that the 401k sales cycle is a long one, and most plan sponsors are not ready/willing to move their plan when you first meet them, it’s essential to have a good drip program that let’s you keep in front of your prospects so you’re always top of mind when the time comes for them to make a move. Consider a monthly newsletter or blog post email, quarterly webinar invites, and at least every 6 months call them and try to get another appointment.
7. Be Valuable
Staying in touch with prospects should not be a sale- a-thon. You must add value to the relationship before you expect them to be willing to give you their business. On your appointments and in your correspondence, always be asking yourself “How can I add value to this relationship? How can I help them right now even if they’re not ready to move just yet?”
8. Be Proactive
One of the reasons having a prospect drip program is so effective is because it keeps things moving forward. Stay in touch. Do what you say you’re going to do. Follow-up. Be proactive and pleasantly persistent. Exceed expectations.
9. Do Your Research
With so many online sources of public plan data, getting the information you need is easy. Before heading into that first call or first appointment, do your research. Go to efast.gov and look up the 5500 information. Find out who is the plan administrator and who are the parties getting paid out of plan assets. Google the company and look up the person you’re meeting with on LinkedIn. With a little bit of research, you can learn a LOT of valuable information that can give you an edge in your prospect meeting.
10. Market Effectively
While it’s often tempting to try various methods of prospecting for new business, the most effective methods are those that have been proven effective for you in the past (“it worked so well, we stopped doing it”) and the ones you find easy, effortless and enjoyable. If you’re just getting started, refer to this article (How to Get New 401k Leads in Your Pipeline) for ideas.