Summer is almost over, and the kids are heading back to school. Now is a good time to help your clients better focus their attention on your offer to provide investment advice for their company retirement plan account.
In my 14 years of developing existing clients into company retirement plan advice clients, I have consistently run into four main retirement plan participant concerns.
This list of concerns is battle-tested with prospects, too. I have made thousands of telephone prospecting calls to plan participants that are now individual company retirement plan advice clients. The key to that transformation is in learning how to respond to these four main concerns.
1. Company retirement plan participants have no access to independent analytical tools that help them identify stock market risk. These investors don’t know the major trend in the stock markets at the time they are fully invested in stock-market mutual funds.
Even when the stock market is rising, most plan participants allocate the majority of their company retirement plan account to mutual funds in asset classes that are lagging the overall stock-market benchmarks. They mistakenly diversify themselves out of a great deal of stock-market investment return.
The confidence to fully invest, or to preserve principal, at key stock-market inflection points is the most important investment management strategy missing for such investors.
2. Individual company retirement plan participants have no logical, organized and disciplined investment management strategy to preserve their account principal.
As U.S. economic and stock market conditions change, the majority of company plan participants remain 100% invested at all times. Family, work and personal obligations take attention away from their investment management duties.
An advisor who expands an existing investment-advice relationship to include advice on the individual’s company retirement account is in a much better position to focus the client’s attention the handful of times each year that require risk-level decisions.
3. The vast majority of company retirement plan investors have no existing fiduciary relationship with an independent investment advisor.
Company retirement plan propaganda and online tools are no match for in-person advice from an investment advisor. Strong existing relationships will beat e-mail newsletters and colorful Internet pie charts every time.