So much work goes into winning corporate 401(k) plans that when the plan is finally converted, most advisors have no strategy for providing the service and communication that is essential to a well-run program. Servicing the plan effectively is essential to maintaining a long-term relationship with the plan sponsor. In addition to a long and successful business relationship, excellent service and communication with the participants can result in ancillary business. If you can provide consistent service, the employees as well as the owners will seek your help with their personal financial needs. You will find that you don’t need to solicit the personal business–it’s more like a dividend from doing an outstanding job with the 401(k). In fact, I make it a practice to avoid soliciting outside business in my communication campaign with my 401(k) plan sponsors and participants. Here’s how I have been successful in growing my business after the plan is converted.
Start by getting the key players’ names, phone numbers, and e-mail addresses on one quick reference sheet. Much of the time you are simply directing plan sponsors and plan participants to the proper place to accomplish their task. Here are the main telephone numbers you’ll need to keep handy:
The help line The 800 number participants call to get account information.
Account manager Solving any issue involving plan administration will require working with an account manager.
Implementation manager During the initial phases of plan setup, takeover, and blackout, most 401(k) vendors assign a manager to work with the plan sponsor during the crucial first months of the plan.
Internet address Even though the Internet address will be given out in the enrollment kit, you will constantly need to give it out to participants who no longer have their kits. Also make sure you understand the process for getting a new user ID and PIN for using the Web site.
The Takeover Process
This is where your job as a communicator begins. First, learn the timing of the takeover process and clearly communicate it to the sponsor and participants. You don’t have to be an expert on the complicated task of account transfer and reconciliation during the blackout period, but you must know the following dates and times:
When the old carrier is notified
When money is transferred to the new carrier
When the blackout period begins and ends
What happens to participant balances during the blackout
Next, hold a group meeting with participants to review your company and the new plan, and to explain the general flow of the takeover. Finally, plan an enrollment meeting to cover specifics such as fund selection and asset allocation.
The enrollment process means anything from a single group meeting to several days of one-on-one meetings with each participant. For smaller companies with fewer than 100 employees we offer a one-on-one enrollment meeting. This has proven to be very effective and allows you to personalize your service with each participant. Here’s how it works. The company sets aside a day or two for the meeting, and each employee is scheduled for a 15- minute private meeting with you (often in an empty office or conference room). At that meeting you can review a specific asset allocation, suggest suitable funds, and help the participant determine a comfortable deferral percentage. Many 401(k) plan vendors offer to have one of their reps do the meeting for you, but do it yourself. As a financial professional your strong suit should be communicating with people on the subject of investments and giving investment advice. This is the best time to establish your identity with the plan sponsor and participants and develop a strong rapport. Some reps will spend days getting ready for an enrollment meeting. The preparation is important but doesn’t necessarily have to take a tremendous amount of time if you know how to prepare. Start by reviewing the enrollment kit. Look through it and make sure you understand the materials in it.