sales champ | PLANADVISER March/April 2011

Cultivating Your Client Base

By | March/April 2011

Sources talked about these six best practices in developing an adviser’s client base:

1. Understand your value proposition. Winning new clients starts even before trying to meet them. “It is ­important that advisers really decide what business they are in, even if they are going to try to work in several markets,” Cafaro says. “The most important thing is for an adviser ­every year to sit down and say, ‘Who do I want to service?’ In addition, have a goal every year.” That could include things like adding five new plan clients with more than $5 million in assets, calling 25 client opportunities a day or ­hiring a service to provide the adviser with 25 meeting opportunities, or coming up with a strategy to keep the adviser’s name in front of each potential client.

Adviser Michael Kozemchak, Managing Director of Institutional Investment Consulting Inc. in Bloomfield Hills, Michigan, calls it “the elevator conversation”: being able to say in 60 seconds what you do and why an employer should hire you. Asked about the key skills advisers need to recruit new clients, Byrnes says, “a lot of the time it is just knowing your story, and how to differentiate yourself, and being able to do that crisply and clearly.” He suggests that advisers do a branding exercise, analyzing their own strengths and weaknesses as well as the competition. Advisers should think about what they want to communicate to potential clients about their client niche, years of experience and expertise, service levels, fees, and how they reduce employers’ exposure to fiduciary liability, he says. Then boil it down to a few sentences about why a sponsor should want to do business with you over others. “A lot of advisers cannot answer that question. People stumble over it,” he says.

Also, have a business plan for recruiting new clients, Byrnes recommends. “If you put something in writing, it is more likely that you will stick with it,” he says. That includes things like identifying target markets based on factors such as the size of the employer or industry type as well as doing a sales and marketing calendar.

2. Get to know the “influencers.” Sources most commonly cite referrals from other professionals as the best way to make contact initially with potential new clients. “We have utilized our relationships with attorneys, accountants, and other ‘influencers’ heavily,” Stone says of meeting new clients through other professionals. “The message is, we want to be a good partner to help them execute the appropriate steps with their clients.” Suggests John Bowen, CEO of San Martin, California-based adviser consultant CEG Worldwide LLC, “Learn how to play nicely in the sandbox with other professionals. So often, we are taught that we need to know everything, and we kick sand.”

Attorneys tend not to work with micro-plans but can be very helpful in making connections with mid-size plans of $20 million and up, Stone says, and play a critical role in meeting employers who have plans with hundreds of millions of dollars in assets. “However,” he cautions, “it takes time for an attorney to have the comfort level to refer you.” Starting to make that connection “sometimes is just a matter of picking up the phone and saying, ‘I would like to learn more about your ERISA practice,’” he says. “Other times, you meet influencers at a conference or other networking event.”

Every plan sponsor works closely with an accounting firm, Carl says. “Networking through professional groups like CPAs is a big deal,” he says. “In every community, there are big accounting firms and regional accounting firms. You want to get to know those people.” Volunteering to do educational talks for an accounting firm’s staffers who work with retirement plans has proved successful­ for advisers he knows. Likewise, he ­suggests similar networking with property and casualty insurers.

Bowen has seen advisers develop new clients by volunteering to do talks for­ ­local CEO groups, such as a theme of “the top 10 things they need to know today to make sure that their retirement plan is as effective as it could be,” he says.