Reality Check
Many financial advisers are actively pursuing a vision for their retirement plan practice that incorporates a projected rate of growth, measured in assets or annualized revenues. A critical mistake that many advisers make is in preparing their marketing plan without devoting sufficient consideration to the number of prospects that present potential opportunity. In consulting with financial advisers (and their production teams), I have discovered that less than 10% have conducted an accurate assessment of the market potential. Without that analysis, you are relying on flawed business intelligence, and you will be ill-prepared for achieving success within the markets you are targeting.
Beginning with incorrect assumptions does not mean that you will not acquire new business. Without building your marketing effort on a firm foundation of timely and accurate target-market business intelligence, your energy and effort is used inefficiently, resulting in wasted resources. Worse, there is a real possibility that you will never achieve your vision simply because there is too wide a gap between your plan and reality.
I recall a specific producer who was leading a team of two other producers and two support staff. She was a wirehouse broker in the Midwest, and annual production for the team was in the range of $1.2 million to $1.3 million. Less than six months before we began working together, she had commissioned (and paid for) a marketing plan from a regional market research firm. The report itself was very impressive, with a thick, glossy cover, high-quality paper, and voluminous data on the area and the local business climate.
Based on that marketing plan, she had established goals and had outlined, in black and white with accompanying color photos, the plan of how she was to achieve her goals. Her marketing plan required that, within her target market of $15 million to $25 million, she and her team needed to add just eight plans per year for a period of four years. It all fit so well. She would be working only in her city (being home every night was one of her high priorities), and within a 25-mile radius of her office. It sounded like a good fit for her and her team. That is, until you looked at the number of qualified prospects within that 25-mile radius.
The total number of plans that satisfied her target-market criteria within her calling area was 24. So, if she called on and closed every available plan in her market area, she would still be eight plans shy of reaching her goal—forever. According to her glossy marketing plan, she needed to get in front of and win every plan in her market, with a close ratio of 133%. That’s right, she not only had to capture the entire market, but also had to gain business that wasn’t even there!
To avoid that kind of mismatch with reality, start with a marketing strategy based upon accurate prospect plan assumptions, and with a reasonable close ratio. Check the math associated with your marketing plan—and apply a past-history reality-check filter against the projections emanating from those complicated spreadsheets. To increase the probability of your success, take full advantage of one of the many prospecting tools available to you so that all of your assumptions are mathematically correct for your target market. It is one thing to have aggressive goals, and quite another to rely on the attainment of goals that are, at the outset, unattainable.
Steff C. Chalk is founder and president of CHALK 401(k) Advisory Board, with a client list that includes corporations, nonprofits, and governmental units. A judge for the PLANSPONSOR Retirement Plan Adviser of the Year award, and a faculty member of the PLANSPONSOR Institute, he is also the co-author of How to Build a Successful 401(k) and Retirement Plan Advisory Business.