Here's where elite 401(k) advisers are focusing their energy

Current approaches to building their businesses may not get retirement plan advisers to where they would like to be

Dec 5, 2018 @ 2:43 pm

By Fred Barstein

Elite retirement plan advisers, the ones most specialized in retirement plans, are primarily focusing on referrals and financial wellness to grow their practices and better service clients.

Based on new research conducted by The Retirement Advisor University and sponsored by State Street Global Advisors, referrals from clients, centers of influence and other advisers will be elite advisers' primary method of gaining new clients. Financial wellness will be a key approach they use to better service and engage clients.

Cold Calling Is Dead

Elite advisers are unlikely to purchase leads from the multiple third-party telemarketers or develop internal cold-calling capabilities, according to the survey of 100 retirement plan advisers. Nor do many plan to use video content, hire outside marketing firms or use outside adviser request-for-proposal services to find new clients.

Most advisers have already developed internal processes that define and communicate their key differentiator, have defined their target markets and have developed their onboarding systems. But the key avenue by which these high-level advisers will find new clients is through various sources of referrals, a tried-and-true method that few firms have yet to perfect.

Financial Wellness, not Robo-Technology

Using automated investment platforms, also known as robo-technology, is the least likely method for elite advisers to use to engage and service clients, followed by using video content, customizing participant messaging, using client satisfaction surveys and creating continuity plans for client administrators, according to the survey, which polled advisers with at least $250 million in defined-contribution assets under management.

But advisers are looking to leverage the demand for financial wellness and use this trend to service clients, as well as find ways to show how the defined-contribution plan can affect an organization's bottom line. Setting goals, priorities and expectations with clients at the onset of the relationship were also high on retirement plan advisers' lists.

These elite advisers have found ways to improve deferral and participation rates, as well as asset allocation; they also realize the value of delivering new ideas and setting up regular meetings with their clients' retirement committees.

Entering the Next Phase

The retirement plan adviser market is entering a new phase, especially for elite advisers. The demand for service is increasing as a result of more sophisticated buyers and robust competition, while fees are declining at an alarming rate. There are ways to combat these trends:

• Hold pricing by focusing on the value and results advisers deliver;

• Improve business processes and efficiencies; and

• Partner with an aggregator or specialty firm and focus on what the adviser knows and does best.

Continuing to do what advisers did to get to this point may not get them to where they want to go. The TRAU survey results show that even elite advisers are still focused on traditional methods to acquire new clients, such as referrals, and are not comfortable leveraging marketing, video or social media, which may reflect their generational biases.

And while these elite plan advisers have done a good job of improving plan performance, most likely through automatic plan features such as auto-enrollment, they continue to struggle to better engage senior management by showing how retirement plans can help improve profitability.

Are larger firms like aggregators able to solve for these issues? Are there still opportunities for elite advisers to grow their practices at the expense of less experienced plan advisers? How many will be able to transition their practice into a real business that can survive without them?

Fred Barstein is the founder and CEO of The Retirement Advisor University and The Plan Sponsor University. He is also a contributing editor for InvestmentNews'Retirement Plan Adviser newsletter.


What do you think?

View comments

Recommended for you

RIA Data Center

Use InvestmentNews' RIA Data Center to filter and find key information on over 1,400 fee-only registered investment advisory firms.

Rank RIAs by

Upcoming Event

Mar 26


Huntington Beach Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in six cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video


The secret to working with next gen clients?

Alan Moore of XY Planning says working with millennials isn't as difficult as some advisers make it sound. Here are three strategies for success.

Video Spotlight

We started as a boutique firm with huge ambitions. Schwab was a perfect fit.

Sponsored by Schwab Advisor Services

Recommended Video

Keys to a successful deal

Latest news & opinion

10 millennials making their mark in Washington — and beyond

These next-generation leaders are raising their voices and gaining influence over financial advice regulation and legislation.

Warburg Pincus among private equity managers interested in acquiring Kestra Financial

Sources say Kestra is being valued at between $600 million and $800 million, about eight to 10 times EBITDA.

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.

Former Merrill Lynch star broker Thomas Buck sentenced to 40 months in prison

He pleaded guilty to securities fraud in 2017; charged clients excessive commissions.

Rules for claiming Social Security at 70

Some individuals' benefits will begin automatically; others have to take action.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print