Is Providing Clients with 401(k) Advice Just a Hobby?
Do you have any current clients who are working? If so, you probably have provided more than a few of them with a quick review of their company 401(k) retirement plan mutual fund menu options.
You can be honest with me. I will not tell anyone; especially your broker-dealer. You are part of an ever-growing list of investment advisors who are managing tens of millions of dollars of client retirement assets on the side—for free.
For years, I have received e-mails and phone calls from investment advisors who proudly proclaim they are in the individual company 401(k) retirement plan investment advice business. The most common reason given for why they give free investment and asset management advice to clients of company 401(k) retirement plans is that it serves as a great client relationship builder.
However, when you are giving part of your investment advice experience and expertise away for free, what value does your client place on the other part of your investment advice?
Providing company 401(k) investment advice for free makes no sense to me. Investment advice is your profession; it’s not a sideline or hobby. You should get paid for the value you provide your clients.
Today’s technology lets any investment advisor build and support an individual company 401(k) retirement plan investment advice niche business. Providing free investment management advice on company 401(k) retirement plan assets should no longer be a client-loss leader.
Have you ever asked your best clients to pay for company 401(k) retirement plan menu investment advice? Don’t be among those investment advisors who never asks clients to pay for the value that they provide.