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?