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January 08, 2021 at 01:19 PM
As an advisor, you’ve probably heard many reasons why you shouldn’t sell retirement plans, such as they aren’t profitable, the legislation is too complicated to navigate or even that your time is better spent elsewhere.
My experience working with thousands of advisors has shown me that these are myths. In fact, by not selling retirement plans, you are doing yourself a disservice.
Retirement plans are not only profitable for your business, but they also help grow it organically while making existing client relationships stickier.
As of 2019, there was $6.4 trillion in 401(k) plans, and according to Pershing’s Retirement Plan Network Case Study, 90% of all 401(k) plans are in the top 10 industries, with future growth expected with small plans under $1 million in assets.
Here we’ll debunk four of the most common myths about selling retirement plans.
Myth: Selling retirement plans are not profitable.
Why it’s false: An advisor might charge 100 basis points on smaller plans, but fees for larger plans can range from 10-50 basis points. While this may not sound like much, it is.
This is because every single retirement plan you manage is an opportunity to create a stickier relationship with your clients.
Think about it this way: If you aren’t currently managing your client’s retirement plans, that means someone else is. That person can easily be forging a deeper relationship with your client, eventually swooping in and taking their other assets.
Leaving yourself open and unprotected like that is not only dangerous, but it also can be devastating for your business. If you look at selling retirement plans as a client retention tool, instead of by strictly calculating basis points, you’ll see that it’s a no-brainer.
Jay Jumper is the CEO of 