PANC 2013: Three Strategies to Help Grow Your Business

Harry Dalessio, senior vice president of Strategic Relationships at Prudential Retirement, gave a keynote address at the PLANADVISER National Conference in Orlando, Florida. He spoke about three strategies advisers can use to help grow their businesses.

Advisers face new challenges, Dalessio noted, specifically in longevity, the transition from defined benefit (DB) to defined contribution (DC) plans and overall coverage in the United States. Advisers must re-evaluate their plans to accommodate participants who will remain in the work force longer and/or will need their retirement savings to last through age 80 and beyond.

Dalessio noted that DC plans have changed over time. “What’s being asked of defined contribution plans today is very different from what their intent was 20, 30 years ago,” he said. “We need to continue to think differently on how we can optimize them and how we can put U.S. workers in the position to really have a secure retirement.” He encouraged advisers to take some of the best practices and lessons from defined benefit plans and apply them to the defined contribution world.

Half of Americans do not have a workplace retirement plan, Dalessio said, which brings about a major coverage issue that affects employers, the government and the industry as a whole. Advisers will need to work hard to solve this problem through services, products, tools and more, he added.

According to Dalessio, those challenges can lead to opportunities, however: the opportunity to lead clients rather than just provide services to them; the opportunity to change the conversation; and the opportunity to show your humanity while tapping into theirs.

The single greatest challenge that advisers face is inertia, Dalessio said. "The antidote for inertia is action, and action requires leadership. … Leadership is needed more than ever for our industry and for your clients.” While not all people are meant to lead, those who do will “reap the benefits of driving stronger outcomes for their clients and ultimately differentiating yourself from a competitive perspective.” For example, Dalessio told the story of the creation of the Chobani yogurt company, which gained ownership of $1 billion of the $6 billion market within five years. If a single Turkish immigrant was able to revolutionize such a commoditized market, he said, surely any adviser who made the decision to lead would be able to accomplish similar change within the retirement industry. 

In order to change the conversation, Dalessio said advisers must approach plan discussions with the idea of “we want it now” participant behavior. He showed a video in which individual children were put in a room with a marshmallow, then told they could either eat the one now or wait until a woman returned who would then give them a second marshmallow to eat. While some children devoured the treat before she even left the room, others waited, albeit impatiently, to receive their reward for waiting. 

The children’s behavior is not unlike that of many participants as they reach retirement. Rather than delay their reward, many pre- and post-retirees want their funds now. “I know most of us didn’t sign up to be a psychologist. But guess what? We are,” Dalessio said, “This is the human behavior we go up against every single day.” He stressed that advisers must keep this in mind when shaping their meetings with participants in order to have the most effective dialogue.

Dalessio ended by explaining the importance of storytelling to help advisers connect with their clients. While advisers understand the industry jargon used to discuss plans, the average worker does not. In these cases, he said, stories can be used to illustrate the benefits of sitting down with an adviser to create a financial plan—and leave participants wanting more. “Stories stay with us a long time,” Dalessio said. “Every single one of you has a story about each one of your clients, and it’s your job to tell that story and build a repository of stories because stories create connections.”