Client Attraction Through Giving

Give in order to get.

That’s the message for 401(k) plan advisers looking to gain new clients from Steve Wilkinson, a retirement plan adviser himself and the CEO of a firm that seeks to help advisers build their businesses. The CEO of k(quote) and a partner and director of operations for Monarch Plan Advisors says “giving,” when it comes to plan advisement, is offering a review of the plan and benchmarking to both prompt a conversation and show your value.

“I’m giving first, before you even hire me to do anything,” Wilkinson says. “I think that is Step 1. I talk to all these advisers who say, ‘I met this client, and they don’t want to move forward.’ But I’m thinking, ‘What did you give them?’”

Wilkinson gained attention in the 401(k) community when he started posting how-to videos on LinkedIn about how he was growing his practice through cold-calling. Now that his practice has grown, he understands the effort it takes to give time and energy to prospective clients at no cost, so much so that he started (k)quote, which offers client attraction, marketing and data tools such as quick fee benchmarking.

Even so, he says that the “free” work for potential clients can not only earn new clients, but save time in the long run, should they sign on.

“You want to have your sales process go right into the onboarding process,” he says.

Wilkinson often hears from advisers who pitch prospective clients with fiduciary matters such as 404(c) compliance, which can help protect plan sponsors against litigation.

“I always say, ‘That’s great, that’s a cool way to get in, but that can’t be your sales process—it can’t be fiduciary stuff,’” he says. “If you can give first and make that start the onboarding process, that’s money. That’s how you build a sales process that works.”

Participant Education Trending

Plan advisers with larger firms may not be focused as much on direct client prospecting. But when it comes to requests for proposal or meeting with prospective clients, the “give first” mentality still applies.

Michael Gheen, a vice president and director of retirement plan services at Oswald Financial Inc., says his team puts significant effort into benchmarking to prospective clients, including analysis of fees, investment lineups and plan design.

“We leverage that to really start conversations with clients,” he says. “We continue to see fee compression in the marketplace. So if they haven’t benchmarked their plan in the last two to three years, they’re probably paying too much.”

In the past, Gheen says, his team was competing with wealth advisers who did not specialize in workplace retirement plan advisement. Today, there are many more specialists who can dig into the various plan aspects, so the quality of benchmarking and other offerings are key to winning business.

One of his team’s advantages these days, he says, is having built out a strong participant education approach and team to offer to plan sponsors. The Oswald Group does some wealth management, Gheen notes, but “the real role that they play is providing education to participants.”

“I know every RFP that we’ve gotten in the last three years, one of the questions is, ‘How are you going to help our participants?’” he says. “We’ve taken that to heart and really have filled out that team and continue to add to that team, because we think that’s our biggest differentiator, having that in-house, personalized education, versus relying on the recordkeeper to provide more generic kind of education.”

Gheen says the firm offers one-on-one meetings to any participant who is interested, whether it is around the 401(k) plan, other benefit areas or just simple budgeting, such as how the choice to buy or lease a car will affect their finances.

“It’s a more holistic conversation about anything in their personal financial life,” Gheen says.

Social Media Generation

Rebecca Hourihan, the founder and CMO of 401(k) Marketing, speaks with her adviser clients about the “giant generational shift going on right now in our country.”

Hourihan notes that, as Baby Boomers retire in large number, Generation X and older Millennials are often the decisionmakers on human resources teams and in retirement plan committees.  

Generation X, she says, often likes information and details before they make a decision. That will take these reviewers to an adviser’s website and social media pages. It is important, Hourihan says, for an adviser to have a professional website that is clear, focused and informative.

“First impressions matter, and you have three seconds on your website to make one, so make it the best possible,” she says.  “As a basic example, do you have 401(k) listed on your website? You’d be surprised at how many advisers don’t.”

The quality and consistency of blog posts matter as well, says Hourihan, who notes that people stay on websites three times longer if there is blog content. If the posts lead to trust and credibility, a prospective client will be more apt to consider signing on. But if they are stale and out of date, it may be a “quiet X-out” from potential Generation X clients.

Older Millennials will dig even further into an adviser’s social media presence, Hourihan says. They will look at LinkedIn, Instagram and Facebook to consider a potential adviser’s focus areas and presentation. These “digital FBI agents,” as Hourihan calls them, will be savvy to what is being posted and focused on if the information is relevant and useful to them as a potential client.

Money Down

To do marketing right, it will likely take spending money, which can be difficult for smaller advisories.

To make the case for putting dollars behind client prospecting, Hourihan cites marketing research from Charles Schwab Corp.’s 2022 registered investment advisory benchmarking survey, which showed that top-performing firms tend to invest more on marketing and business development—on average, about 2.3% of revenue. When looking at all 1,218 firms in the research, that spend dropped to 1.5%.

Advisers should think about this spend in terms of “what are our goals are and how do we want to see our business accelerate in the future?” Hourihan says.

Large aggregator firms often have teams to work on outreach and client attraction, the marketing chief notes. For independent advisers, it can be useful to tap into the nexus of benefit advisers around you. LinkedIn is a great source to identify the other people working with plan sponsors, such as certified professional accounts or third-party administrators, who likely have other clients of a similar size and in a similar region.

“For the folks that are local to you, go have a coffee or beer with them,” Hourihan says. “They probably have other clients that are businesses with a question about their 401(k) plan, and after a quick touch-base, they’ll know who you are.”

The focus on profile, Hourihan says, is as important as ever in the current market.

“There has been a significant uptick in adviser RFPs,” she says.

With that in mind, her firm is working on a new offering for 2024 that helps advisers stand out from competitors and, in the process, win some new plan sponsor clients.

Wilkinson, of (k)quote, says it is also important to keep marketing and outreach front and center, even as an adviser or firm gets busy with existing clients.

“Activity is king,” he says. “If you’re not actively marketing or outsourcing that marketing, then you’re not growing.”