Time to Be Looking for Clients Who May be Looking

A study released recently by Fidelity Investments says that 69% of small businesses review their 401(k) plan at least once a year and about a quarter (26%) of small business owners will look for a new 401(k) plan provider within the year.

“Most employers will review their plans in October, ahead of year-end deadlines,” said Edmund F. Murphy, executive vice of Fidelity Institutional Retirement Services Company, in a company statement. This marks a wonderful time for retirement plan advisers to be prospecting. So, how do you go about this prospecting?

Most advisers keep some sort of list of prospects they do not currently do business with. Hopefully you have notes on how you have contacted the people on this list. In the best of circumstances, a direct mail campaign isn’t likely to have much impact and might not reach sponsor’s eyes in the time frame you need to make an impact. Although e-mail is more cost-effective, the volume of junk emails, coupled with increasingly sophisticated filters, means that your message may not even make it to the prospect, let alone be read.

One approach that may seem a bit counter-intuitive is to spend some time filtering your database to disqualify really awful prospects rather than always searching for a needle in a haystack. Work to create a short list of questions that can help determine whether or not you should spend more time pursuing prospective clients at this time (just because a prospect is disqualified for the moment, doesn’t necessarily mean it shouldn’t be reevaluated in the future, though).

Once you’ve pared down the list, few approaches are as effective as a personal contact – but you have to avoid the cold-call brush-off. Call with a purpose, a piece of information to share that you think may be of interest to a plan sponsor. For example, have the clients been visited by their adviser recently to prepare for the year-end and open enrollment period? Are they planning communication for the increases in contribution and deferral limits for 2007?

These news items provide you with an entrée for that prospecting call — not to mention a good way to reach out to existing clients. After all, why let your good clients be poached by an enterprising adviser?