7 Things Advisors Should Do Before 401(k) Plan Selling Season

The retirement plan selling season is about to start. More than half of 401(k) plans are sold from July through year-end, according to Josh Forstater, Vestwell senior vice president of national sales.

In this time period, “many small businesses, midsize and large businesses think about their benefit cycles and they want to make changes going into the following year,” he said at the recent webinar “5 Things Advisors Should Do Before Selling Season.”

“It’s also something that’s very tactical because of all the different considerations business owners need if they want their employees to put away money for 401(k)s before year-end,” he added.

“Starting probably in September, people get back from vacations, [so] it does get to be game time and kind of prime selling season” for retirement plans, according to Josh Itzoe, Fiduciary Wor(k)s CEO and founder. “But right now is what I would consider the preseason. And so there’s a lot of things that you can do to get prepared so that when the game starts, you can play your best.”

Despite the title of the webinar, Forstater, Itzoe and Jake Rushton, Strategic Retirement Partners managing director, pointed to seven things advisors selling 401(k) and other retirement plans to companies should be doing now and, in a few cases, should have already started doing. See the slideshow above for details.

1. Craft a story for the practice.

To craft the right story for a practice selling retirement plans, it’s important to effectively communicate to prospects, Itzoe said. It’s important for each practice to figure out what to tell those prospects and how to differentiate its offerings from those of rivals.

Also important: Educate your prospects about “how you can lead them to a better fiduciary future for them and for their employees,” he added.

Advisors “need to know what it is you sell and be able to put it in a way that someone can understand that that will bring them results faster than anybody else,” according to Rushton.

(Image: Shutterstock)

2. Build the practice’s infrastructure.

To build the right infrastructure, it’s important to scale the practice, Itzoe said. Each practice should be developing strategies it can use “to make things efficient and effective and give you capacity to grow,” he said.

One key suggestion is to “systematize and streamline your work,” he said, adding: “Retirement advisors do way too much manual stuff” that technology can help with. “Ninety percent of what you're going to do for one client, you're going to do for another client,” he said.

Advisors should “have one consistent fund lineup that you can implement across all of your different clients,” he also suggested. “It’s going to save you a bunch of time. There's going to be a lot less due diligence requirements. There's going to be a lot less research that you have to do each quarter.”

(Image: Adobe Stock)

3. Be referable to clients and centers of influence through marketing.

Staying connected with your clients is one key way to make yourself referable. Itzoe suggested finding out what your practice does that’s most valuable to clients and spend more time doing that.

Keeping current clients happy is one good way to make your practice referable to potential new clients.

With that in mind, Itzoe suggested advisors provide the same services for all clients to avoid the potential situation in which two of your clients meet at a party, talk about your practice, and find out you’re doing more for one of client than the other.

(Image: Adobe Stock)

4. Identify the right targets.

It’s crucial to figure out which companies you want to market to and who some of the best prospects are, Itzoe said.

“I would come up with a list of about 150 to 250 companies that kind of fit the profile that you want” and then research them, he said.

“I would go on LinkedIn. I would build out a profile [on] who are the key decision-makers, who's the owner, who's the CFO, who's in HR or operations,” he said. "Then figure out if you have clients or even colleagues at your firm who have relationships with other COIs who are connected to those folks.”

A 401(k) plan is “like a back-burner issue for most companies,” he said. “What you want to make sure that you've done is … make sure you've …. connected with people regularly so that when it becomes top of mind, you are top of mind,” he added.

(Image: Adobe Stock)

5. Get the yes and move forward from there.

Advisors aren’t finished when a company agrees to sign with them for a retirement plan, Itzoe said. It is important, he explained, to “make sure that you validate in the minds of your new clients that they made a really good decision and put yourself in a position to continue to bring on more clients.”

(Image: Shutterstock)

6. Create a client calendar.

It is enormously helpful for an advisor to create a client calendar in which they tell the client “this is what we're going to do in Q2; this is what we're going to do in Q3, this is what we're going to do in Q4,” Itzoe said.

This “comprehensive approach … really builds around different themes throughout the year” and makes it clear to clients that “there's certain things we'll cover maybe every quarter with clients meeting with them quarterly or [every] six months,” he explained.

It also builds confidence in an advisor among a client because they “know what it is going to be like to be a client of yours,” he added.

(Image: Adobe Stock)

7. Make sure to keep track of industry deadlines.

Forstater stressed that advisors selling retirement plans should keep track of important deadlines. As examples, he said the safe harbor deadline is Aug. 1, while the deadline for converting existing plans in 2022 is Aug. 5, the deadline for converting existing plans in January 2023 is Sept. 22, the deadline for new plans in 2022 is Sept. 16 and the deadline for new plans effective in January 2023 is Oct. 14.

Then there are a whole bunch of deadlines that are different in multiple U.S. states, he pointed out.

(Image: Shutterstock)

7 Things Advisors Should Do Before 401(k) Plan Selling Season

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1. Craft a story for the practice.

2. Build the practice’s infrastructure.

3. Be referable to clients and centers of influence through marketing.

4. Identify the right targets.

5. Get the yes and move forward from there.

6. Create a client calendar.

7. Make sure to keep track of industry deadlines.

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7 Things Advisors Should Do Before 401(k) Plan Selling Season

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1. Craft a story for the practice.

2. Build the practice’s infrastructure.

3. Be referable to clients and centers of influence through marketing.

4. Identify the right targets.

5. Get the yes and move forward from there.

6. Create a client calendar.

7. Make sure to keep track of industry deadlines.

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