From the May 2007 issue of Research Magazine • Subscribe!

Breaking Into Retirement

Seventy million baby boomers are approaching retirement age. And yet, only a small percentage of financial professionals sell employer retirement plans to their clients. Why? According to this book, subtitled "The Financial Advisor's Roadmap to a Successful Retirement Plans Practice," it's not such a hard market to break into after all.

Authors Tom Foster and Todd Thompson are employer retirement plan experts for The Hartford. They say that financial professionals that do sell retirement plans have, across the board, higher incomes and that there has never been a better time to get into this business.

Foster and Thompson point out that the Pension Protection Act of 2006 made the rules and regulations governing employer-sponsored retirement plans more complex and more confusing, which means your clients need the services of a good financial planner in order to navigate the new environment. As a result, there are multiple opportunities to educate prospective clients, particularly given the staggered implementation of the measures. "These ongoing services will serve to cement your relationships with existing clients and new employers," the authors write.

Still, the authors acknowledge that marketing employee-sponsored retirement plans comes with several challenges. First, it requires a longer sales cycle than selling individual retirement plans. The selling ratio may be considered low, with only 30 percent to 40 percent of pitches closing, and a lot of people may be reluctant to enter into an employer retirement plan.

Foster and Thompson dismiss such concerns, noting that well-constructed retirement plans do not come with an unwanted long-term commitment. In fact, they say, financial planners who already provide workplace retirement plans can service more businesses and grow their practice.

After detailing successful selling practices, the authors focus on the life cycle of retirement plan sales. Just as in any financial plan selling, they recommend defining a target, whether it's a geographic area or a focus on a specific sector such as the health care industry, grocery stores or school districts. Then, it's important to pick a good service provider that provides a variety of employer-sponsored retirement plan designs, assist in the sales process and offer ongoing client service. Foster and Thompson provide a helpful list of questions financial planners should ask the potential service provider, including:

o What type of employer would favor the plan designs this provider offers?

o What areas may raise concern or prevent the advisor from closing prospects with this provider's services and products?

"Make sure you discover whether the company's business is growing, how much revenue it brings in, its retention rates and how many plans the company loses each year," they advise.

The authors also offer a chapter on prospecting, noting that the key to successful prospecting is being a good listener. "The sales process for employer-sponsored retirement plans isn't a single transaction. Instead, it's a life-cycle sale with four key stages of development." This includes prospecting, making the sale, educating employees and follow-up, but the reward is "client retention, rollover business and ancillary sales."

The book also explores presentation tactics, including confirming how much time the presentation will last; reviewing the agenda with clients; summarizing previous activities and introducing the team. It discusses the importance of differentiating yourself from competitors. The bottom line, they write, is to make sure a presentation is fun and delivered with passion. "Keep clients engaged. Create a presentation that's different from the norm so you and your message will be remembered long after you leave."

The final chapter provides a fictional case study that reviews the steps to prospecting, overcoming objections and gaining sales as well as providing additional advice on how to get started and smoothly deliver a close that gets a client to say "yes."

Readers will be aware that the book is essentially a pitch to sell Hartford's products. Nonetheless, many of the tips transcend corporate allegiances and the book would be particularly useful to those considering venturing into the employer retirement plan arena.

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Mary Scott is the co-author of Companies with a Conscience and can be reached at maryscott303@comcast.net.

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