How to Build a 401(k) Practice by Cold Calling

Cold calling’s not hip, fun, modern or sexy. But it works.

And there’s one 401(k) advisor out there who’s out to show the retirement industry that this time-tested prospecting method can build a million-dollar practice from scratch in 3 years.

Perhaps you’ve come across his popular posts on LinkedIn, where he is painstakingly documenting his efforts to build a 401(k) plan practice using direct marketing while optimizing his process—and remarkably, sharing everything he finds.

Meet Steven T. Wilkinson, QPFC, CRPS—the Los Angeles-area advisor who is documenting and sharing how to grow a 401(k) practice through cold calling and cold emailing.

“I wish I did something cooler—like Jake (Rushton)—he does video marketing,” Wilkinson said at the beginning of his interview with 401(k) Specialist. “That’s so much more trendy than what I’m doing. I’m doing cold calling. Oh my god, I don’t want to be the cold calling guy!”

Yet he has in fact embraced it, and explains that his appreciation for the method grew by watching his mom—who built a successful cold-calling company that was started in her bedroom at home.

“I grew up in a cold-calling culture,” Wilkinson said, going on to explain that served him well when he started at Merrill Lynch back in August of 2008, when “the world was basically ending.” He likened the experience at the time to essentially getting dropped off in a cubicle, and told, “good luck and godspeed.”

“So I thought I’ll call people—my mom called people,” Wilkinson said. He was calling on residences, and also on businesses about their 401(k)s. “I started setting so many 401(k) meetings, the rest was history, so I started to focus. I stopped calling residences altogether.”

He called from 6:30 in the morning to 8:30 at night, “eating peanut butter and jelly sandwiches all day. It’s all I could afford.”

If you’d have asked him who had the advantage when he started at Merrill in 2008, “I’d have told you everyone but me. They all went to really good schools like Cornell or Brown. They were the kind of people you’d think would be financial advisors, and I was still finishing up my degree. So I felt like I was kind of looked down on,” he says. “I had the advantage though, because No. 1, I had a belief in cold calling—my mom cold called. It had to work, right?”

For a couple years, he learned the hard way. “I didn’t know anything about 401(k)s. I literally knew nothing.” He recalls closing his first 401(k) plan, and the business owner asking, “So what’s the maximum you can take a loan out of a 401(k)?” and remembers thinking to himself, “that’s crazy you can take a loan out on a 401(k) plan—they’re for savings. That’s how little I knew.”

He started studying as much as he could just to learn. “I ended up moving from Merrill to 401(k) Advisors, which is now NFP,” he says. “And then ended up starting my own 401(k) consulting firm in 2013. That’s the firm that we built to about a million bucks in revenue in 5 years, basically cold calling.”

Fast-forward to Summer 2022

“My goal is to basically try to build a million-dollar practice in 3 years—and share everything.”

But let’s quit living in the past for a minute and get back to what caught our attention at 401(k) Specialist in the first place. We came across an advisor on LinkedIn who is ambitiously trying to build a 401(k) practice essentially from scratch with a hard-core devotion to cold calling.

“I literally started in August,” Wilkinson tells us. “If I don’t embarrass myself too bad, my goal is to basically try to build a million-dollar practice in 3 years—and share everything.”

He posts weekly progress updates with a purpose: “This weekly thing I’m doing, in my mind I’m breaking what I feel are limiting beliefs. Advisors have a limiting belief that cold calling doesn’t work. My LinkedIn goal is just to prove to advisors that ‘cold calling doesn’t work’ is a limiting belief. Yes, it’s hard, but everything worth having is hard. They can have a great life and make an impact for their clients by cold calling or outsourcing it to someone else.”

In addition to attacking that limiting belief, Wilkinson said he also wants to show advisors that no matter their background—they can do this. This is why he’s sharing everything. He brings up the old, “If I can do it, anyone can do it” mantra.

Wilkinson has spent countless hundreds of hours cold calling over the course of his (still young) career. But he didn’t think it would be of much interest to other advisors—until he started posting about it on LinkedIn.

“I didn’t know that people would be interested in cold calling,” he said. “It’s funny because there’s a time in my life when I wondered, of all the things I could have known a lot about, why’d it have to be cold calling? Why can’t it be something cool?”

The first video he posted about cold calling on LinkedIn received about triple the amount of impressions or engagement than with anything else he’d posted. “I’m like man, is there interest in cold calling?”

Whether it’s curiosity about employing an old-school approach or genuine interest in making Wilkinson’s process work for themselves, the answer from the advisor community has been “yes,” and they want to know more.

“People would be posting messages asking, ‘Does cold calling still work?’ And I’m like, what do you mean stillwork?”

The initial interest motivated him. “You know what I’m going to do? I’m going to try to build a calling team and then document it, and I’ll prove that it’ll work. I’m tired of getting these messages saying it doesn’t work,” Wilkinson said. “I’m just going to document me building a sales process and prove that cold calling works. Now I’m posting it and trying to build a sales team, and trying to get actual data. Because me telling you that cold calling works just isn’t good enough.”

The Process

Readers that want to learn the complete picture of how he does it are definitely encouraged to look him up on LinkedIn. This article is not intended to share everything like Wilkinson does in his posts. But we will provide an overview of his process.

Wilkinson figures nine hours of cold calling generates one appointment a week. “If it does that and let’s just say its 48 leads a year, times a 15% closing ratio. He knows his closing ratio is at least 15% (worst case) but probably more like 20%.

He also knows $10,500 is his average revenue per new client. He figures 635 401(k) plan prospect meetings over 3 years will get him to $1 million in revenue (635 meetings x $10,500 average new rev x .15% closing percentage). Only 476 meetings are needed if his closing ratio is 20% (476 x $10,500 x .20 = 999,600).

“If my math is right right—and there’s a lot of assumptions there—on the third year I should be able to generate $750,000 in revenue, just in that year alone, by this process. That’s my goal—and to prove that cold calling works.

In his “Week 23 Update” posted in mid-January on LinkedIn, Wilkinson revealed that his cold calling and cold emailing program has led to 34 meetings being set with 401(k) plan sponsors: 28 from cold calling and another six from cold emails sent.

Of course, he’s not doing this all by himself. Wilkinson is also working to develop a team of cold callers, who can work off his painstakingly created and nuanced script (developed over hundreds of hours on the phone). He’s had two cold callers working consistently, but his goal is to eventually have at least four calling on a regular basis. By this August, he wants to double it to eight callers, and in the third year get up to 12.

He readily admits he is still learning about building a cold calling team, solving for how to onboard them, teach them and scale the program. “I want to figure out the best process to train them,” Wilkinson said. “What are the expectations, what are the best leads, how many dials do you need to get an accepted meeting?”

The aforementioned Jake Rushton, a high-profile advisor who says he’s a huge fan and friend of Wilkinson and chats with him every couple of weeks, is nevertheless skeptical of the cold calling approach to building a 401(k) practice.

“I’ve been very open with him that although cold calling can work, it’s outdated and very ineffective. You are trying to line up the chance of someone actually answering a call, which is not common now,” Rushton said. “As well as them being open to discussing their 401(k) with someone wanting to sell them services. I love his passion for stats, but the amount of wasted time not providing any value is too high in my opinion.”

Wilkinson’s response? “By the end of this process, I’m going to be able to tell you that if you do X, Y many times, and follow this process (or rather than you do it, you hire someone part time to do it), you should close Z much in revenue on this timeline,” Wilkinson said. “What’s that worth?”

Rushton said while 401(k) advisors can always cold call, if they also have content on the internet demonstrating their results and expertise they will see an increased close rate. “So for Steve, I’d like to see him use these meetings from the cold calls to build a framework of content he does in person for a digital email funnel or landing page experience a plan sponsor can go through whenever they want.”

A savvy video marketing person himself, Rushton says he has noticed a nice progression in Wilkinson’s video skills as he has continued to document his cold calling process. “These video skills will easily help him with the prospect and client content I hope to see him produce.”

Wilkinson said that if Rushton “was able to show me a similar process that works as efficiently or better (like this many videos should equal this many meetings with prospects and could scale it), I’ll put my phone down for good,” adding that his LinkedIn interactions with Rushton have been one of his favorite parts of this process.

It should also be noted that another very high-profile 401(k) advisor, past NAPA President and 2018 TAPO award winner Alex Assaley, told the audience during a session at the 2022 NAPA 401(k) Summit that he still makes a concerted and regular effort when it comes to cold calling, despite being well established.

“We target companies where we think there could be a great fit and try to get in contact with the leaders at those companies,” Assaley said during the NAPA session. “You have to be disciplined and stay very accountable to yourself to do it.”

Learning a New Skill

“I think we’re all trying to find a silver bullet, myself included. The thing is that everything works from a marketing perspective, but nothing works well.”

Steven Wilkinson

“Everything works. Nothing works well.”

That’s a saying you’ll find at the end of many of Wilkinson’s LinkedIn posts. We were curious as to what he means by that.

“Basically I think we’re all trying to find a silver bullet, myself included. The thing is that everything works from a marketing perspective, but nothing works well,” he said.

“Cold emailing works, referral marketing works, paid ads work, affiliate-type marketing where you’re working with other firms… But nothing works well. The only thing that works and triumphs over everything is volume and a lot of it.”

So that’s what he’s doing with cold calling.

Wilkinson said he’s spent the past couple of years trying to learn how to “market,” a skill he didn’t have. “I knew how to cold call, and I knew how to be a 401k advisor, but when it comes to actually marketing, I knew almost zero.”

So he went to a conference in Las Vegas where serial entrepreneur Gary Vayerchuk was speaking. Hearing Vayerchuk talk about the value of documenting a process struck a chord with Wilkinson, and he realized he needed to document what he was doing. “It just dawned on me that I had this issue where these advisors are telling me cold calling doesn’t work.”

The best way to show them it works is by doing it and documenting it.

“I’m committed to this process! I want to show that cold calling works and that ANYONE can build a practice. It just requires diligence and grit (like everything else in life),” Wilkinson said. “We hit some adversity along this journey but I think I solved for the issues I ran into and 2023 will be an AWESOME year.”

In early January, Wilkinson related a recent story about an advisor reaching out to him who took a look at his cold calling script and training and asked, “Why are you making all of this available?!?!?”

Wilkinson’s response?

“There’s a science to this. You can drop me in Nashville and I can build a 401(k) practice.”

“The weird (but true) answer is often you’re called to serve the person YOU  were 5-10 years ago,” he says. “And, even though it would 100% (from a revenue perspective) be a better use of my time to focus on just consulting, this is something I’m called to do.”

It’s got to be making his mom proud.

“Growing a business is hard, and I just want to make it less hard (if I can) for anyone like me who literally is starting with nothing.”

Now, he says his cold calling skills can make him successful anywhere across the country.

“There’s a science to this,” he concludes. “You can drop me in Nashville and I can build a 401(k) practice.”

SEE ALSO:

• 4 Great Takeaways from Top Advisors: 2022 NAPA 401(k) Summit

• Building a Business Cold Calling: A Story About the American Dream