Prospecting $100M+ Plans Yields Success

Advisers divulged winning strategies at NAPA/ASPPA 401(k) Summit.

LAS VEGAS—While retirement plan advisory services is largely a referral industry, it is possible to successfully solicit new plan sponsor clients, even among mid to large-size plans.

That was the message of speakers on the “What Do Plan Sponsors Want” here Monday, presenting at the National Association of Plan Sponsors/American Society of Pension Professionals and Actuaries (NAPA/ASPPA) 401(k) Summit.

A full-time dedicated “cold calling” lead generation staffer at PSA Fiduciary was surprised that they had no success among plans in the $5 million to $20 million range, said Jania Stout, vice president with the fiduciary consulting firm. Sponsors in that range, it turns out, did not grasp some of the retirement planning concepts that PSA Fiduciary espouses. Surprisingly, the lead generation staffer has found that there is new business to be had among plans in the $100 million-plus range, Stout said.

And plan advisers need to develop a thorough sales process, from lead generation to research to the retirement plan presentation to closing the business, said Joshua Dietch, managing director of Chatham Partners. “Don’t just show up for the finals,” Dietch said. “Develop a checklist and think it through, emphasizing instilling confidence and the vision in the plan sponsor in how it will be to work with you.”

The reason a sponsor hires an adviser or replaces an existing one is most commonly due to the need for specific expertise, such as a recordkeeper search, a governance issue or concern about a new regulation, such as the 408(b)(2) fee disclosure, Dietch said. A survey that Dietch conducted among 75 plan sponsors found that specific needs drive searchers 43% of the time, he said. That’s followed by dissatisfaction with the current adviser (24%), due diligence (16%) and the absence of an adviser guiding the plan in the first place (12%).


“You have to show you have a better mousetrap,” Dietch said. “How you offer services is more important than what you do. The difference between winning and losing is instilling conviction in the sponsor of what you as an adviser can do.” Start by demonstrating your knowledge, he suggested. Next, emphasize how you will benefit the plan sponsor.

Presentations need to be specific and buttoned-up, since 53% of the time, sponsors are reviewing five or more advisers, Dietch said. While it is true that referrals occur in 81% of replacements, the Chatham survey found, solicitations occur in one out of four cases (23%).

To continue to grow your business, sales presentations are key and will become even more so, since the market share of professional retirement plan advisers running plans is expected to grow from 25% in 2012 to 48% by 2015, added Joseph J. Masterson, senior vice president of Transamerica Retirement Solutions. In that timeframe, the number of professional advisers will increase by nearly 50%, Masterson said.

“Clearly, clients view you as a necessity—you help them feel comfortable with their plan,” Masterson said. “Concentrate on their confidence in your fiduciary process. You don’t even have to be a fiduciary. Just control and document the process, and you will have the client for a very long time. And don’t leave out data on how on track people are to successfully retire because of your services.”

When preparing a sales presentation, research a sponsor’s Form 5500 filing with the Department of Labor, Stout said. You can learn a lot by seeing if they have previously worked with an adviser, she said. Then request an in-person preparation meeting to ask questions about their priorities and mission statement. Research the company’s website and the LinkedIn profiles of the firm’s executives, Stout added.


 “Customize your presentation to the audience,” she said. “Differentiate yourself by, for example, telling them about your education and advice, your fee structure or your annual stewardship report.”

As a retirement plan adviser builds out their sales, service, documentation and presentation efforts, it’s important to use a customer relationship management (CRM) tool, such as Salesforce, Stout said. Use the CRM not just for communication tracking but also to “measure and track results, such as, perhaps, the fact you conducted 180 one-on-one meetings for the sponsor,” Stout said.

And do not forget that if your plan sponsor clients are primarily Baby Boomers, don’t text or email them. “Pick up the phone,” Stout said. “Most of our clients running the plans aren’t Millennials.”

Another idea that plan advisers might not think of but that can be extremely useful is surveying clients to find out what they like about your services, and what they don’t like. Don’t be shy about asking employees who attend your meetings to send a message to their human resources department if they like what you bring to the table, Stout said. Those messages can be invaluable in client satisfaction and retention, she said.

Plan sponsor clients are constantly looking for additional services from their plan advisers, Masterson said. “The list is never-ending,” he said. “Target-date funds and custom target-date funds have exploded, along with savings rates, total savings projections and on-track retirement readiness reports.”

Dietch added: “Help them with governance, reduction in the number of recordkeepers, better outcomes and how you measure success. Know what their plan is about. Don’t be an order-taker. Find solutions to improve their plan.”

Pitches can work, Masterson said. In many cases, advisers are not actively serving their clients and “many products were bought a long time ago.”

“At the end of the day, the plan sponsor cares about results and action,” Dietch said. “Demonstrate results and how you deliver on promises.”