Five ways for financial advisors to prospect 401(k) clients

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Most advisors don’t specialize in 401(k) plans, but the reality is, offering one to clients can be a lucrative tool for growing your book of business. Assets in 401(k) plans tend to grow consistently, which can generate a reliable source of revenue growth for financial advisors—and retirement planning can work hand-in-hand with other services you offer, introducing you to more participants that could become wealth management clients down the road.

Plus, small business owners sponsoring a retirement plan have a lot of responsibilities on their shoulders, and many could benefit from the help of a financial advisor who has their best interests in mind. This underserved market offers a huge opportunity for financial advisors looking to grow their book of business and expand their services.

However, there are a variety of easy ways financial advisors can prospect and connect with small business 401(k) clients. Here are some tips on how to do it:

How to prospect small business clients as an advisor

1. Prospect among existing clients

One of the easiest ways to find clients who may be interested in a small business 401(k) is to prospect among your existing book of business and identify areas of opportunity. If you have a client looking to lower their annual corporate tax liability for the year, discuss how advantageous sponsoring a 401(k) plan can be—even for owner-only businesses. Similarly, if you have clients who haven’t been interested in 401(k) in the past but now have a new decision-maker at the company, see if they’d be interested in offering the tax-advantaged benefit to employees.

Talk to prospects about how you can help them evaluate the investments offered in the plan, determine if fees are reasonable, compare various provider pricing models, and offer some fiduciary protection to really showcase the value you offer as an advisor on the plan.

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2. Turn everyday contacts into clients

Small talk is common when you’re at the dentist, doctor, barber, or hairdresser—and often one of the first questions they’ll ask you is, “What do you do for a living?” This opens the perfect opportunity to talk about helping small business owners make the most of their retirement plan, benefitting both the business and the participants in the plan. If they tell you they don’t already have a retirement plan they’re saving in, mention you’d love to discuss the benefits of 401(k) for their business when they have more time—and leave your business card with them.

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3. Utilize referrals from professionals you work with

It’s likely that you already work closely with other professionals—such as CPAs, mortgage consultants or payroll providers—who share a similar clientele. Utilizing referrals can be beneficial to both sides. For instance, maybe one of your clients is looking for tax advice, and you know a local CPA you can refer them to. In turn, the CPA can refer clients to you who may benefit from starting a retirement plan to help save on taxes.

4. Network with local business owners and decision-makers

Joining your local Chamber of Commerce is a great way to meet local business owners and decision-makers you might never meet with otherwise. Attending events put on by the Chamber is a great way to network and connect with these potential prospects. Be prepared to discuss the various services you provide and how each service could benefit them as a business owner. Make sure to bring business cards with you and try to secure follow-up meetings while you are face-to-face if possible.

5. Use multiple communication methods

Not everyone checks their email every day or listens to their voicemail, so maximize the number of potential clients you reach by utilizing multiple communication methods, such as phone calls, emails, social media posts/messages, or even texts—especially with younger generations.

These channels can also work in tandem with each other; an email can be a great follow-up to a phone call or a voicemail, and a LinkedIn message can be a great way to get your foot in the door with a potential client you met at a local Chamber event. Keep your messages short and sweet:  simply highlight the benefits of your services and ask to schedule a more in-depth meeting with them to discuss how you can help their business.

Using 401(k) to grow your book of business as a financial advisor

We often hear financial advisors say they don’t work with small business retirement plans, but companies of all sizes need retirement savings solutions. Don’t write off a plan as being “too small” to work with; even Individual(k) options can help grow your book of business and set your clients up for retirement success—and be relatively hands-off for you.

Some 401(k) providers specialize in small business plans, enabling you to remain the face of the plan while they do most of the time-consuming work associated with managing a 401(k) plan.

To learn more about the features and benefits of an Ascensus retirement plan, give us a call at 800-345-6363.