I feel like the cowboy in the old Western movie that went looking for the bad guys. Most days I come home hunched over in my saddle, full of arrows and bullet holes. While I’m lonely, I don’t want to be, and I would welcome your company in building a successful advisory business serving individual plan participants.
This might sound contrary to popular wisdom. Every year at the top financial industry conferences, there are seminars and speakers who urge investment advisors to grow their 401(k) plan business. This has been especially true the last few months regarding the new fee disclosure requirements for 401(k) company retirement plan participants.
I have read countless articles about the new “level playing field” for 401(k) advisors. I also have been educated to the fact that nearly every small company retirement plan sponsor’s business is now “up for grabs” due to the new fee disclosure requirements.
All the current headlines and marketing focus is on professional investment advisors providing advice at the company retirement plan level.
Sometimes I feel lonely providing investment advice to those most likely to benefit from a company’s retirement plans—the participants. My loneliness is largely due to the fact that I have quietly and efficiently built an investment-advisory niche business over the last few years doing just that.
My registered investment advisory firm is not a provider of company retirement plan level investment advice. Intentionally, I avoid working with company retirement plan sponsors, human resource professionals and company retirement plan providers.
When I came up with this strategy, it wasn’t intentional. To be totally honest, I just avoided all the things I hate to do. I don’t like committees, I don’t bid for my advisory services, and I could not write a request for proposal if the lives of my two children were at stake.
My company provides stock market risk management and relative strength-based asset allocation advice to individual company retirement plan participants. I started asking my existing clients about their individual company retirement plan accounts 14 years ago and I have never looked back.
The current focus of the financial-services industry is for investment advisors to build a 401(k) advice business at the company plan level is narrow and one-sided. In my experience there is much more satisfaction and career fulfillment providing investment advice to individual retirement plan participants.
Call me old-fashioned, but when everything that I read and hear tells me about the great opportunity to provide the same advice and services to the entire company retirement plan, I think that might be a crowded marketplace.
I have always thought that the best investment advice marketing opportunities come from existing client relationships, providing these clients with an expansion of the investment advice that I already provide them.
When was the last time you spoke with an existing client about how comfortable they are with the current holdings in their company retirement plan?