Creative Prospecting Helps Make the Sale

The three stages of selling a retirement plan into a company, prospecting, proposing and closing all require preparation and creativity, according to Marilyn Pearson, Vice President at Merrill Lynch.



Prospecting requires preparation, Pearson said, speaking this week at the 401(k) SUMMIT in San Diego, but when done correctly, an efficient prospecting plan will give an adviser many qualified prospects that will bring in business beyond just the 401(k) plan. “People do 401(k) business because they want the other stuff,’ Pearson said, “but it grows trust with the small business owner because it shows them the adviser cares about their business.’
When prospecting in the small market, advisers should be prepared for common stalls and objections, she said, including:
  • “I put all of my money back in my business.’
  • “I am not interested.’
  • “I already have a financial adviser.’
  • “We have a plan and we are happy with it.’
  • “Send me something.’
Pearson suggested that advisers must be creative and persistent to get the plan sponsor to consider becoming engaged in a conversation. Ask the plan sponsor open-ended questions to get them to continue the conversation, she said. Questions such as “what do you currently do for your employees’ retirement savings or your retirement savings?” can get the plan sponsor talking about their plan and might give you some ideas on which you can capitalize.
A prospecting idea favored by Pearson is to send a book that will get some attention, such as Jack Gardner’s “How to Write an Investment Policy Statement” with a note that says “have you reviewed your IPS lately? If not, we can help. We will be calling in three weeks to discuss.” When you put something in their hands that the plan sponsor can use, you have already shown him you care about helping him run his plan better.
Two other books she suggested were “Best Practices for 401(k) Plan Investment Committees,” by Rocco DiBruno, which might be better for a plan you are prospecting that is a little larger, Pearson said. Also, for small business owners who have put all their money back into their business, David Rich’s “Start Late, Finish Rich” can be very helpful and encouraging, she said.
Although Pearson suggested sending books to prospects, she cautioned the audience they should never mail more items than it is possible to follow-up on.



After you have been invited to a meeting with the plan sponsor, it is your responsibility to educate the plan sponsor about why he should establish a plan and why that should be done with you. “Be the solutions person,” she said.
Many employers focus only on the costs of a plan, and forget about, or aren’t aware of, the benefits to the employer through tax credits and deductions, she said. Every adviser should be able to answer the plan sponsor question “what’s in it for me?”
Further, there are many creative plan designs that can be used, based on company characteristics, Pearson commented, saying the following group of questions can be a good start:
  • How large is your business?
  • What are your current resources?
  • What’s your long-term business plan?
  • What do your employees want?
  • What are your goals as an employer and as an individual?
In discussing and comparing various plan designs with business owners, advisers should touch on five characteristics: contribution limits, benefits and features, complexity, cost of administration, and cash flow requirements, she said.
If even at the proposing level, you are still running into opposition from the sponsor who just isn’t sure about whether or not to offer a plan, Pearson said an adviser can suggest that he help the sponsor do something she calls an “indication of interest.” She says she usually does this through a pizza night, where the sponsor hosts all the employees and the adviser then does a little education and asks them if a plan was offered, would they participate and how much would they save. This can also be a back door way of closing the business, she said, because once the adviser is in the door, educating the participants, its hard for the plan sponsor to bring in anyone else.


The closing meeting is your opportunity to show your value, Pearson said. She suggested arriving at that meeting with a fiduciary audit binder and a fiduciary audit check list. While there, show a sample enrollment kit and conduct a quick enrollment session, so the committee can actually experience what their employees will go through.
One of the worst things an adviser can do when closing business is over promise, Pearson said. You should provide a Commitment Statement to your clients, giving details of services to the plan. However, she warned the audience not to be overaggressive, saying it is always better to under promise and over deliver. In the closing meeting advisers should ask the committee, “is there anything else we can do to help you make a decision?”
Lastly, after you have shown your value to the plan, and explained what you will do to help them fulfill their obligations, don’t forget to ask for the order. “Ask not, get not,” Pearson said.