Financial advisors who make a conscious and targeted effort to strengthen relationships with existing 401(k) plan sponsor clients can increase revenue significantly, a new study suggests.
Strengthening client relations can increase advisors’ income by 40% after 10 years, estimates Fidelity Investments, Boston, which conducted the study.
Plan sponsors are more focused on the level of advisor support and knowledge than they are on fees, investment choices or the advisor’s relationships with company executives, Fidelity found.
Plan sponsors said they are generally not completely happy with advisors help with employee communications and group investment meetings, according to Fidelity.
Improving satisfaction among plan sponsor clients can lead to longer plan retention, more referrals and greater opportunities to build relationships with plan participants, the report says. In fact, sponsors who says they are “very satisfied” with their advisors expect their relationships to last over 11 years, which is more than 3 years longer than those who say they are merely “satisfied.”