What You Need to Know
- Retirement plan advisors can choose which services they want to provide.
- Assets tend to be sticky.
- Some of the best prospects might already do business with you.
If you’re an advisor looking to develop a presence in the retirement plan industry, positioning yourself as a credible source in this space may be easier than you might think.
Now more than ever, business owners and HR professionals are looking to financial advisors to help them with retirement plan consulting and fiduciary support.
Your existing clients — business owners and executives — already know you and trust your financial guidance.
Helping them implement or enhance a workplace retirement plan is a chance to offer even greater value to their businesses and their personal portfolios.
The opportunity for you to gain business and grow assets under management is significant. The market size of the U.S. retirement and pensions plans industry is $934 billion, and the market will grow 2.3% this year, according to IBISworld.
Transitioning Into Retirement Plans
Offering retirement plans is a natural extension of what you already do.
As a retirement plan advisor, you will help employers manage investment selection, plan design and costs, legislative and regulatory changes, administrative tasks, compliance, fee benchmarking and integration with other benefits.
To become a retirement plan advisor, you will want to explore educational opportunities, including industry accreditations, such as those offered by the National Association of Plan Advisors including the NAPA Certified Plan Fiduciary Advisor, or CPFA, credential.
For example, in partnership with NAPA, The Standard sponsored a retirement plan advisor bootcamp in November, at no cost to the advisors. More continuing education webinars will be available throughout the winter and spring.
The Responsibilities of a Retirement Plan Advisor
Retirement plan advisors help plan sponsors select, monitor and manage providers like recordkeepers and asset managers.
RPAs may help with participant education and enrollment as well.
Of course, you can structure your practice in the way that best suits you, by partnering with providers who specialize in specific functions and fiduciary responsibilities.
Through your expertise, you can give your clients:
- Investment knowledge.
- A meaningful benefit for their employees, with tax advantages for the business and for plan participants.
- A way to help prepare employees to retire at the right time.
- Relationships with CPAs and other centers of influence.
- Guidance from an established and unbiased partner — you.
Once you make the initial sale, you should see consistent growth in assets.
Because plan withdrawals are typically only made for retirement or hardship, the assets are stickier too.
In general, retirement plans have a longer sales cycle because they involve multiple decision-makers and intricate fiduciary requirements.
One of the many advantages of retirement plan consulting is the people and partnerships that will help you service the plan after the sale.
Evaluate your client roster for prospecting opportunities, and work with your retirement plan providers to help start the conversation.
You’ll enjoy the benefits of ongoing compensation while supporting clients by partnering with additional experts who can offer additional solutions that will benefit clients and deepen your book of business.
Prospecting for RP Clients
Since you already have developed business clientele, make sure you do thorough client research.
Do they have a qualified plan? Are your primary business contacts the decision-makers on the plan? Have you learned of any pain points or opportunities to provide improved support of the plan and participants?
For cold calling, resources like Free ERISA exist, but, if they are not producing the answers you seek, you might consider warm calling by turning to a reputable provider or partner with a local third party administrator, or TPA.