From In-House Referrals to Cold Calls: Strategies for Client Attraction

The day-to-day work of retirement plan advisement can often overwhelm big-picture planning. But having a strategy for attracting new business is crucial for long-term growth.

Whether an adviser is at a small, medium or large firm, strategies for client attraction can help in the coming year.

Using a Strategic Advantage

The retirement planning division within the Oswald Companies oversees approximately 325 401(k) plan and 403(b) plans and $5 billion of assets under management, according to Michael Gheen, vice president and director of retirement plan services.

But the division, Oswald Financial Inc., only has about 20 people on the team—a small part of Oswald’s roughly 1,000 employees across employee benefits and insurance.

“The breadth of the overall organization leads to a lot of opportunity to expand internally,” Gheen says. “Just cross-selling to our clients within the firm that we don’t currently sell retirement plan services plan to [creates business growth].”

Oswald started a new initiative this year focused on cross-selling services among business lines, according to Gheen. The “360” approach to the business leverages strong existing relationships, as opposed to seeking new clients from third-party referrals. “The best relationships that we form are [often] with benefit brokers where referrals can go back and forth,” Gheen says. “Historically, we’ve worked or tried to work with attorneys and CPAs [certified public accountants], but with limited success.”

Gheen’s relatively smaller team also uses plan benchmarking as a tactic to approach and talk to new clients. They will approach potential clients with benchmarks of retirement plan fees, investment lineups and plan design to show the possibility of better options.

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

The strategies are important, he says, as the marketplace for retirement plan advisement has grown more competitive. In the past, retirement plan advisers were often competing against wealth advisers who did not specialize in the space, he says. Now, his firm competes against a lot more specialists.

“I think our strategic advantage is we have taken a very proactive approach in building out our education team,” Gheen says. “They do some wealth management, but the real role that they play is providing education to participants. […] That’s our biggest differentiator: having that in-house personalized education, versus relying on the recordkeeper to provide more generic kind of education.”

Attracting New Clients

Troy Hammond, CEO of Pensionmark Financial Group LLC, has 350 financial advisers who can potentially bring on new retirement plans. He says planning for client retention boils down to three main categories.

“First: How do I increase my top-line revenue?” Hammond says. “Second: How do I increase my bottom-line revenue, my profit through operational synergy? Then the third thing would be enhancing the deliverables to clients.”

When tackling target top-line growth goals to increase revenue, Hammond considers net new client growth, cross-selling and new lead generation, rather than overall market growth among existing clients. Each firm’s outreach and approach will depend on its size and capabilities.

Hammond also looks at how to make operational functions of the firm more efficient, such as whether to staff up or outsource to a platform.

Finally, he thinks about what resources his broker/dealer platform support team has to offer clients beyond the general retirement plan.

“All of those things combined are very overwhelming to do on your own,” Hammond says. “For a financial adviser, or if you’re on your own, which not many people are anymore, it’s about stepping back and breaking those categories into small pieces and probably having shorter, smaller goals. If you’re part of a larger organization that has those resources, it’s going to be spending time with the platform and really understanding what they can do to help you in all three of those categories.”

At Pensionmark, Hammond says, the firm has an organic growth team that handles outbound marketing, cold-calling and cross-selling into other business lines. The team also holds seminars across the country, bringing together advisers, prospects and clients.

“I would say that the easiest way is to be part of a group that can do that for you,” Hammond notes. “If you don’t have those resources available to you, you have to cherry-pick what [strategy] you think is the most successful, because you’re not going to be able to do that all.”

Anticipating the Future

David Kaufman, CEO of Voyant, a financial planning software provider with a focus on adviser solutions, notes the importance of being aware of and attuned to advancements in artificial intelligence, particularly for firms looking to work directly with participants to shift toward wealth management.

Kaufman, whose firm focuses on financial advisers, says advisers should aim to institutionalize a process that will differentiate them from low-cost and generative AI competitors.

“Advisers should also start to understand how generative AI can make their business more efficient by simplifying and offloading many routines and time-consuming tasks such as data acquisition, compliance and account services,” he says. “These efficiencies will allow advisers to focus more time on engaging with each client, while providing services to a larger number of clients.”

In addition, Kaufman says individual savers are more focused on holistic wealth, something on which advisers working with participants can hone in.

“[Helping clients] should include all of their assets, pensions, liabilities, incomes, Social Security benefits and other elements to build a client’s detailed current financial condition,” Kaufman says. “I recommend identifying and categorizing expenses by levels of importance, so clients can understand the trade-off of how near-term leisure spending might impact long-term basic needs.”

At Oswald, Gheen is also looking to diversify streams of revenue beyond the traditional defined contribution space and to expand product lines sold to clients.

“We have a lot of traction in nonqualified plans,” he says. “We’re doing more and more with defined benefit plans, HSAs, really diversifying the mix above and beyond defined contribution sales while broadening our offerings.”

In the coming year, Hammond says Pensionmark is focused on scaling the business.

“We’re bringing a lot of new advisers to the platform,” he says. “We’re investing a lot into the platform. That’s our biggest challenge day-to-day, just managing all that growth.”

Correction: fixes number of plans the Oswald Companies oversee.