If you know where to look, there’s plenty of opportunity in the retirement plan space.
So, said TD Ameritrade Institutional’s Skip Schweiss today at the Excel 401k: The Advisors’ Conference in Las Vegas on Monday morning.
“Retirement plans are the sweet spot for advisors,” he said as he hosted a panel of advisors whose unique journeys provided insight on what works—and what doesn’t.
Jairo Gomez, director of retirement plan services at California-based Hanson McClain recalled one meeting during his wholesaler days with a firm that boasted plenty of wealth management clients, but no 401(k) business.
“It’s as if they were trying to sell me on the marketplace and opportunity,” which in a way they were, as they soon asked him to join as their primary 401(k) advisor.
He did, and in six years amassed plans with more than $200 million in assets.
The reason Dennis Markway, CEO of Iron Horse Wealth Management, entered into retirement advising?
“Out of spite,” he said which drew a laugh from the packed room.
As Markway had worked his way up through the insurance side, he saw problems with what he called “the machine” and felt it was taking too much away from the consumer.
Fees and expenses were north of three percent and he saw a chance to diversify the wealth management business and behave differently as a retirement specialist.
It seemed like a straightforward play to emphasize and focus on plan sponsors, all while creating systems and partnerships that would help lower fees said Markway.
“You don’t have to be a rocket scientist to go after this market,” quipped Schweiss.
Markway says the best secret in the industry is that servicing 10-20 plans is not that bad if you do it right and make it efficient — and it’s worth the work continued Markway.
“It’s an increasing and growing business and it’s very sticky,” he added.
Synergy Financial Management’s John Flavin said he learned not to just blast out quotes via email when asked.
“It’s better to sit down with the CFO or HR director and walk them through the plan.”
His firm also hosts regular seminars for plan sponsor decisionmakers and during the presentation, “we hammer on fiduciary responsibility and that it’s up to them to do fee comparisons.”
Flavin said he learned to invest in simple add-ons such as a site dedicated to seminar registration (Synergy uses Squarespace, an inexpensive website creator) to reinforce quality. Or offering CE for attendees which can be as easy to administer as collecting signatures to verify attendance and credit.
He said they will send 2000 mailers get 10 companies to attend, but the conversion rate is worth it. Also partnering with mutual fund companies has proved fruitful and he said they have jumped at the chance to co-sponsor a lunch and seminar at an upscale restaurant.
Markway’s firm has focused on diversifying their workforce which has helped expand their footprint and has led to more diversified client base as well.
Summarizing the panel’s experiences and what they have learned along the way, Gomez sagely advised, “Don’t be everything to everyone. Identify your niche and understand that every plan you work with has an ROI that goes beyond the basis points.”
Lynn Brackpool Giles is a contributing editor to 401(k) Specialist. Giles is a former Managing Director of Communications and Consumer Services for the Financial Planning Association (FPA), where she oversaw all corporate, legislative, and consumer communications. In her current journalistic practice, she is a frequent contributor to numerous financial services industry publications.
