Advisors who serve the defined contribution retirement plan market are much more likely to win business from DC clients by networking than by cold calling, according to a Franklin Templeton Investments survey released Wednesday.
Indeed, the survey’s findings show that 81% of plan sponsors sought advisors through recommendations or referrals, and less than one quarter responded to an advisor solicitation. In addition, 60% of plan sponsors cited “personal fit/sales process” as their method to initially screen potential advisors–and these two criteria trumped both price and expertise.
Pricing, notably, was more likely to lose a bid for an advisor than win one, according to the Franklin Templeton survey, whose results are published in a white paper, “Insights on Closing the Sale,” available on Franklin Templeton’s Retirement Center website. Franklin Templeton Investments manages over $125 billion in retirement assets as of Sept. 30 for individuals, small businesses and institutions.
The paper addresses three key areas: lead generation, prospect management and finals activity.
“Business development strategies … are critical when vying for business in today’s highly competitive retirement plan marketplace,” said Yaqub Ahmed, senior vice president and head of Investment-Only Division-U.S. for Franklin Templeton Investments, in a statement. “In an environment where relatively few plans change record keepers in a given year, our research provides actionable insights advisors can use in building their retirement plan business.”
Networking Is Essential