Branching Out

In an ideal world, a retirement plan adviser’s prospect pipeline contains a standard set of data that an adviser uses to bring consistency and efficiencies to his sales process. The purpose of the “fully-populated” pipeline report is bringing new clients to an adviser’s book of business. The pipeline is populated initially with quantitative data (such as plan size, number of participants); advisers then massage that data by incorporating their own insight and expertise into each prospect. The result is information that a plan adviser should then be able to use to his own advantage in trying to acquire those plans as clients.   

However, what if the pipeline is not as full or long as the adviser would hope? If an adviser knows that the pipeline has capacity, how does one “cram the pipeline”?

A radical technique that I have used (and have observed being used by others) over the years is low risk and carries a potential for a high return for the adviser and his practice.   

What can be done to create a better outcome?

Consider doing something different; something aimed directly at the pipeline and the corresponding sales results. Every adviser can readily identify the five companies or five retirement plans within their market area that are coveted as the ideal five plans (the “special five”) that are currently under the control of another adviser.   

Instead of going through your “normal sales process” (which heretofore has yielded no pipeline-worthy progress or results) consider forcing these “special five” into your pipeline. There are a multitude of criteria that one could use to winnow the suspect list to your “special five.”   

Consider the following examples of how you can inject this foreign matter into your pipeline:

Assets of $100 million or greater: Consider approaching these prospects via their ERISA counsel; or, if they have no ERISA counsel, consider referring them to your ERISA counsel contacts.

Employees of 100 or more: Consider approaching these prospects via their plan auditor, or approach the company through the Human Resources area with an emphasis on plan participant training.

Assets between $1 million and $20 million: Consider approaching these through the plan sponsor’s banker (in this scenario, I am referring to the commercial loan officer), and make a strong case that the banker will never lose a commercial account as the result of poor investment performance or poor services from the bank’s Investment or Trust Division.

If not by assets or participants, is there another way?

Your road map here can be as diverse or restricted as you prefer. Advisers may target a “special five” from within a concentrated industry; whereby advisers can leverage their own brand within a small group from within an industry­ (i.e., construction, manufacturing, etc.); or target your “special five” by geography (when being home with one’s family each evening is of high importance); or compile your “special five” from the most recognizable (brand recognition) prospects in your market.

The major point here is that, once you decide that you are going to inject your “special five” into your pipeline, be very selective as to which prospects you target. (Go after those firms that would make your book profitable.)   

The run at your “special five” is different from the rest

These prospects require special attention. They will be labor-intensive and will not always fit into the repeatable model that you have been building for years. These five prospects will introduce a significant amount of variation into your business but, remember, this is only five accounts—and landing any one of these accounts would quickly make it worth your time and effort.   

Admittedly, your attempt to identify, target, close, and service any one of these “special five” prospects is outside the norm. However; this practice is an attempt to reach a fuller utilization of the capacity your firm possesses.

Steff C. Chalk is CEO of the Fiduciary Consulting Group, a fee-only fiduciary consulting practice ­serving corporations and nonprofits. A judge for the PLANSPONSOR Retirement ­Plan Adviser of the Year award, and a faculty member of the PLANSPONSOR Institute, he is also the ­co-author of How to Build a Successful 401(k) and Retirement Plan Advisory Business.