Prospecting in Turbulent Times

Art by Lily Padula

This summer, prospecting is on the upswing, Nate White says. “Certainly, we all experienced a slowdown in the spring. But I feel like we’ve emerged from that, and we’ve been having more conversations with sponsors.” White is founder and managing principal of Teros Advisors in Lafayette, California. “There’s a new normal for businesses, and some companies are trying to figure out what they have to do next. Others are doing well during this time, and looking to enhance their plan and focus on taking care of their employees.”

Plan advisers always have to be patient with prospecting, but now “you have to be even more sensitive to how and when you approach these companies,” White says. “You really want to show that you’re here to help them and bring value to them.”

The Mechanics of Outreach

Westminster Consulting LLC in Rochester, New York, amped up its outreach to potential new clients over the past few months, says Sean Patton, a partner in the firm. With the opportunity to meet new prospects at events temporarily on hold, Westminster’s advisory staff has gotten more involved with online events such as webcasts and typically does two to five of those weekly. “The networking that used to be done in person is actually a lot more efficient now, because it’s all being done electronically,” he says.

Teros Advisors has kept in touch with its existing prospects, as well. “We have gone back and reassessed how we were approaching them. We have looked at, ‘What are their hot buttons now?’” White says. Plan sponsors may be more focused currently on topics such as market volatility and a return-to-work strategy for employees.

Prospects that had been considering a big move, such as a recordkeeper change or major shift in their plan’s investment menu, mostly have put those on hold for now, White says. “Here in the Bay Area, many people have said they don’t expect to be back in their office until 2021. So many of those decisions are getting pushed off, because there’s no bandwidth at employers for making those changes now.” These companies are too busy dealing with urgent business and workforce issues, he says.

With new and existing prospects, Westminster has shifted to an online meeting format. “We’re doing a lot of virtual ‘cups of coffee,’” Patton says. “I had been wondering, now that we’ve done that for a few months, are we getting to the point that we’ll see some folks getting ‘Zoom fatigue’? The answer is no. People are getting used to this as how we’re going to do business for the time being.”

While online meetings can have technical challenges, White sees them as an opportunity to build personal rapport with sponsors. “With all the meetings we usually do face-to-face moving to Zoom temporarily, we’re all showing ourselves differently with our [current and potential] clients,” he says. “I think it’s positive that people are seeing us in our ‘normal’ habitat, while we’re working from home, and we’re seeing them that way. Maybe somebody is wearing a T-shirt, and you’ve never seen that person wearing a T-shirt before. Or maybe that person’s dog is jumping on the couch behind him while he’s talking. In many ways, I think the rapport we’re building is even better than it was before.”

Although they’re working remotely, Westminster’s team members coordinate their outreach to potential new clients. “We have leaders in each area of our practice, so they’re ‘beating the bushes’ on those topics. There are also several of us who talk with potential clients about all areas of our work,” Patton explains. “And then, when the discussion gets more specific, on specific areas, I turn it over to our expert in that area, or bring them in on the conversation.”

The Westminster team members keep in close touch to coordinate those efforts. “In our group, we spend a lot of time discussing what’s top-of-mind for plan sponsors,” Patton says. “We have bi-weekly, ‘virtual’ meetings when we discuss what we’re hearing from organizations that are prospects and the conversations that each subject-matter expert is having with sponsors.”

Following up effectively with employer prospects—balancing your desire to keep in touch with a contact with the reality that the person is busy—requires a thoughtful approach. “Be the signal that cuts through the noise,” suggests Michael Doshier, senior defined contribution (DC) adviser strategist in T. Rowe Price’s retirement-U.S. intermediaries business, in Baltimore. “To connect with sponsors now, you’ve got to cut back on the time investment for someone to notice it, to read it or watch it, and then to follow up with you.”

Plan Sponsor Consultants in Atlanta has a database of over 7,000 prospects that it has been building for nearly a decade. “Every month, they get an email from us, and it’s designed to drive people to our website, to curated, valuable content,” says Managing Director Michael Kane.

New for this year, the advisory firm has started sending a second type of email to certain sponsor prospects, based on its background research on the issues those individual plans face. “It’s more of a fiduciary ‘call to action,’ and that is very specific to each retirement plan,” Kane says. “It mentions a fiduciary area that could be improved for that plan.” The issue could be high fees, poor investment performance versus peers’, or not having made all the required regulatory filings. Getting the email has motivated numerous sponsors to contact Plan Sponsor Consultants, he says, and the advisory firm can then do a high-level fiduciary assessment on that issue for the sponsor prospect. “We can talk with them about, ‘Here is the issue you have. And if you want to get help to mitigate your fiduciary risk, we can do that on a project basis, or if you’re looking for a new plan adviser, we can take on that role.’”

Targeting Approaches

With employers so busy, and many working from home, Aaron Pottichen takes a targeted approach to prospecting. “If you’re cold-calling like crazy now, you’re probably not finding as many people in their office,” says Pottichen, senior vice president at Alliant Retirement Consulting in Austin, Texas. “For business development, many people are probably taking a shotgun[, or broad-based,] approach. But to be successful, you have to narrow your scope: You have to have a more specific approach.”

Teros Advisors is changing how it approaches existing prospects because of the shifting priorities of employers. “You need to understand the new workplace priorities for HR [human resources] directors and CFOs [chief financial officers],” White says. “That is the key, moving forward. If you just want to do things the old way in prospecting, you’re going to miss out on what’s really important to companies today.” For example, some companies that are currently doing well are thinking about workforce-retention strategies such as an enhanced match, while struggling employers more often are looking for ideas to control their match costs.

Doshier sees a continuum in how to approach potential employer clients, based on their present mindset. “On one end of the continuum, some employers are being driven now by core business issues, because their business is in jeopardy. If someone is in that boat, you can give them technical support on things that can help them weather the storm.” For example, many may need a simplified explanation for how to think through their match-suspension options, he says. “Sorting that out for plan sponsors, especially at small businesses, really helps. You can help them find a way out of this mess.”

For employers dealing with heavy turmoil in their business, getting their attention may mean approaching them about helping with fiduciary risk-management basics. “When you’re in a period of turmoil, you tend to focus on ‘putting out fires,’” says Craig Rosenthal, a senior vice president at Fiduciary Benchmarks in Lake Oswego, Oregon. “And your day-to-day, or even year-to-year, duties get back-burnered, because you’ve got bigger issues.”

But plan fiduciaries’ responsibilities remain, Rosenthal says. “Everybody has bigger problems right now: The difference is that plan fiduciaries still have a liability issue if they’re not doing what they’re supposed to be doing,” he says. “There are things that plan fiduciaries are still supposed to be doing, such as holding committee meetings and documenting the decisions made, monitoring their service providers and making sure fees are still reasonable.”

In the next spot on the continuum, Doshier puts sponsors at businesses that are doing all right in general but that have a retirement plan with challenges. “There is much that advisers can do for these people,” he says. “You can ask them, how long has it been since they shopped their plan to recordkeepers? How long has it been since they looked at their investment menu and default investment? And talking about what I call ‘legs and regs’—legislative and regulatory developments affecting plans—works well with this group.”

Further along the continuum, Doshier sees employers with a healthy business and healthy plan that are focused on getting their employees safely back to work and helping them where possible to deal with this challenging time. “For employers like that, financial wellness has exploded as an area of interest,” he says.

Doshier describes the final group of employers—those whose business, retirement plan and workforce strategy are stable—as starting to think about how to take their plan “to the next level. These sponsors want to know, ‘What is the future plan design that will be a difference-maker?’ I think the big one now is thinking holistically about retirement-income options. The SECURE [Setting Every Community Up for Retirement Enhancement] Act took a big swing at trying to make plan sponsors more comfortable with in-plan retirement-income options. We’re at a point where the things that have stopped plan sponsors in the past are at least being re-evaluated.”

Overall, sources point to a couple of areas as being especially important to employers now. After seeing their employees’ financial stress jump in the past few months, more employers feel motivated to build up their financial wellness program. “Their employees have been traumatized, fearing for their jobs or worrying about the future of their company,” Rosenthal says. “This crisis came out of nowhere: In mid-March, [Americans] all realized we were in trouble.”

With employees on edge about their finances, Rosenthal thinks many skeptical employers may change their mind about offering a financial wellness program. “In the past, there have been some concerns from employers that didn’t want to be ‘parental’ with their employees,” he says. “If we’ve learned anything from the past several months, it’s that maybe it’s time to be more parental with employees.”

Kane also foresees more employers opting to offer an emergency savings program for employees. “Employers are wondering, ‘Is there a vehicle we could use to help out our employees, so that people are not so reliant on 401(k) loans—so their 401(k) account doesn’t become a checkbook?’” he says.

This summer, Alliant Retirement Consulting started doing monthly webinars for sponsor clients and prospects. A June session that focused on crisis leadership got especially good feedback. It featured a co-author of the book “Extreme Ownership: How U.S. Navy SEALs Lead and Win.” Says Pottichen, “Sponsors said it was something different, and helpful. It’s a topic that is aligned with what they’re doing now, but different than [content] they get hit with often.”

Alliant organized the session with the goal of offering employers useful tips to help navigate this difficult period. “We want to succeed, and we want our clients to succeed,” Pottichen says. “The leadership of a company will determine whether it is successful or not during this time. And if we can be helpful to them in this area, hopefully they’ll think of us when they need help with their retirement plan.”