‘How I Boosted My Plan Practice’

Stay Ahead of the Curve

Seven years ago, just before fee disclosure was starting to gain traction, Brian Graff, executive director and CEO of the American Society of Pension Professionals & Actuaries (ASPPA), met with Rick Canipe, the principal and founder of MillenniuM Investment and Retirement Advisors, to discuss the implications of the upcoming fee disclosure regulations.

MillenniuM sat down to take a long, hard look at the Employee Retirement Income Security Act (ERISA), recalls James Holland, the firm’s director of business development, and realized that compliance was the No. 1 issue they needed to get a grip on. “ERISA is complex,” Holland says. “We realized compliance could get folks into trouble, because a retirement plan has many moving parts.”

Noting that ERISA is a massively complex piece of legislation, Holland points out that the majority of the bill focuses on the compliance aspects of running a plan, not on the investments people choose. At the time, he says, much more attention was being paid to investment choices. “But the world is round,” he says. “Just because something happened a certain way for years, doesn’t mean it has to continue that way.”

Build Your Team

The answer? Assemble a skilled team. Holland says ERISA attorneys, an Internal Revenue Service (IRS) enrolled agent, compliance team, an auditor, and a certified public accountant (CPA) are some of the key players in effective client service. The team makes is easy to run a compliant plan, he says. Without the team, it’s very difficult to make it work.

First find your partners, Holland advises, and simply dipping your toe in the water is a waste of time. “Jump in the deep end and surround yourself with partners ready to help you,” he says. If you contact three leads and it doesn’t work out, you can’t throw up your hands and say it was a waste of time.

The time factor and level of commitment are critical. A few hours a week is insufficient. Holland recommends devoting a sizable amount of time—perhaps 25% of one’s work week—to the development of the retirement plan practice.

These moves have resulted in solid, organic growth through client acquisition for MillenniuM over the past five years, which Holland estimates conservatively at 35% a year. “It’s only going to get faster as people understand this space,” he says. The firm operates under a flat-fee model only.

Use Digital and Social Media Tools  

You can’t simply reject digital and social media tools with a blanket “they won’t make compliance requirements,” says Chuck Hammond, co-founder of the 401(k) Study Group in Hanover, Pennsylvania. First it was email that worried providers—then the Securities and Exchange Commission (SEC) said it was OK to use email. Everyone was afraid to use Twitter, and then the SEC said it was OK to use Twitter.

Hammond points out that social media is highly scalable. “I reach almost 50,000 advisers alone on LinkedIn,” he says. “I can’t make 50,000 calls at the push of a button.”

While some advisers seem cautious about using what they don’t understand and can be quick to reject tools on the basis of assuming their clients are not using sites beyond Twitter or LinkedIn, Hammond is adamant about the need to stay current. “Don’t be afraid of the new, and don’t be a snob,” he says. More women tend to use Pinterest and more 17-year-olds use Snapchat, but that’s no reason to avoid these sites and tools, Hammond says. They might not be right for you, but you may be going out there with one less tool in your toolbox. “You should know how other people find experts,” says Hammond, an avid user of LinkedIn, Pinterest, Snapchat and the recently unveiled Postwire.

Hammond uses Postwire.com to build pages of personalized content for the firm’s sponsors and partners. The Postwire site describes itself as an attraction and retention tool to engage prospects beyond email, calls and meetings. The lowest tier of service is $35 a month.

Hammond recommends using sites to actively contribute in the retirement plan space for both advisers and plan sponsors. He finds relevant, meaningful information that allows advisers in turn to share relevant content. “Put it all in one spot, and use it to develop yourself,” he says.

“When people are trying to see if you know what’s going on, the one thing they’re going to want to go is your blog, your site, your LinkedIn profile,” Hammond points out. “Twenty-six percent of individual investors will go to your own online presence because they like the anonymity before they ever meet you.”

Which sites an adviser picks is less important than actually creating a unique Web presence, Hammond feels. “You need to pick one and use it to build a grocery store of your expertise: what’s important, growing, trending, and what’s coming down the pike,” he says.

His firm generally takes two new plans a year.

Advisers have to commit themselves to this part of the business—working with an individual or a business is very different from supporting a 401(k) plan, says Adam Nugent, president of Foresight Wealth Management in Sandy, Utah. “You can’t do it alone,” he says. “You have to have a great platform and a great operations team in order to scale this part of the business.”

At Foresight, Nugent explains they developed policies and procedures to service this part of their book of business, and established a specific 401(k) division, which allowed Foresight Wealth Management to price plans at much lower rate than the norm, while remaining profitable.

“We expanded our customer services and contact with our clients,” Nugent says, building custom Web pages for clients to be able to access their retirement accounts. Designations have been helpful, and Nugent says that working with several benefits providers lets them complement one another. “One focuses on the health insurance, and the other on the 401(k),” he says, “and we get referrals from other professionals.”

In the last 24 months, Nugent says the firm has more than doubled the number of corporate retirement accounts.