If you’re like most advisors, plan growth is one of your highest priorities. However, for many, growing a business is an elusive dream or a worst nightmare. The typical advisor spends very little time on outreach, relying instead on referrals or direct-to-plan-sponsor marketing.

This “brute force” marketing worked in the past, but plan sponsors have become increasingly unresponsive to it. Today’s retirement plan market requires a new, more thoughtful approach.

The competitive environment requires outreach and tailored so that it resonates with prospects. Effective outreach begins with asking some fundamental questions: What will drive my future success? What is my mission? And how do plan sponsors understand my value?

Who’s in the Driver’s Seat?

Many advisors approach their marketing efforts with a message that suggests, “I’m better than other advisors!” Unfortunately, this focus on being “better” or “differentiated” from the rest of your competition fails for two main reasons: first, it focuses on a comparison and leads to the follow-up question “Better how?”; and second, it’s focused on other advisors rather than the needs of the plan sponsors. 

A more effective approach concentrates on designing and delivering a high-quality experience and showing that you are uniquely different than other advisors. When building ongoing loyalty and deep, relational bonds is the central focus, what other advisors are doing becomes irrelevant. What does matter is that each plan sponsor has a uniquely satisfying experience.

Respond or React?

What is your mission? Do you promote yourself as someone who is ready to respond to a plan sponsor’s needs, or are you looking ahead and taking action in advance of a situation? Many of us count “responsiveness” as one of our noteworthy traits. We take pride in how quickly we can respond to a client’s needs or requests. Instead consider the value of reacting in advance—anticipating a need before it arises.

Take a lesson from everyday life. Isn’t it better to purchase a generator before the snowstorm and check the spare tire in the car before the blowout? Wouldn’t it be wonderful if someone was there to deliver those goods and services before the problem arrived? As an advisor, one of your roles is to act as that “savior,” to solve or prevent crises. 

What You Do Versus What You Know

The next crucial questions an advisor should ask himself are: “Why have I been hired? Am I being paid for what I’ve done in the past or retained for what I know?” It’s an important distinction, because advisors who are paid for what they do are usually judged by the performance they generate over short periods of time and the price they charge to deliver it.

This arrangement is still the most common and is well understood by many plan sponsors. As a result, it’s harder to be uniquely different and stand out in a crowd. If you are being paid for what you’ve done in the past, it’s harder to secure relationships with plan sponsors and avoid being replaced by a competitor. You’re likely to feel constant pressure to do more and charge less.

Instead, redefine your relationship with your plan sponsors, and seek to become a trusted advisor who is retained for what she knows. By doing so, you take the opportunity to be seen as a significant and trusted professional whose wisdom and technical input is valued. This can lead to plan sponsors greatly appreciating the larger scope of your expanded value.

Redefine, Reshape and Restructure

Redefining your business doesn’t have to be complicated, but it will take a concentrated effort. You need to define your unique value proposition (UVP), create a targeted marketing campaign, and develop methods for communicating with prospects and clients. AllianceBernstein offers guides and seminars on each of these topics if you are interested in learning the specifics, but the basic steps are easy.

1. Create your UVP. It should include an effective message that is:

  • Singular—highlights one clear idea
  • Significant—generates a “wow” response
  • Immediate—quickly shows the benefit
  • Superior—favorably compares your expertise
  • Solution-based—solves an immediate problem

2. Target your group. There are three main ways to target your group. The first is based on industry. For instance, if you review your book of business, you may realize that you’re already connected to a few industries or groups such as lawyers’ or doctors’ offices. Or you may have past work experience in a particular industry. Sometimes the connections are obvious, but as you spend more time with an existing plan sponsor or prospect, you’ll likely discover other, less obvious connections.

The second way is to select a target group based on plan size. Conduct plan searches through Larkspur Data or FreeERISA, and think about which market segment you want to focus on. To home in more effectively on a target segment, you might want to consider which plan sponsors have been relatively underserved.

The third way is to approach the several niche markets beyond the realm of the standard DC plan. These niches make up a small percentage of the retirement market, but they can be “burgeoning areas of growth and asset-gathering potential for firms willing to look beyond the crowded mainstream retirement markets,” according to Cerulli Associates.[1]

3. Create a capabilities brochure. Your capabilities brochure should convey how well suited you and your business are for referral advocates and plan sponsors. It should not only clearly lay out your UVP, but should also show how you solve your target group’s problems.  

Consider your target group from its members’ perspective. Stand in their shoes and think about the common challenges they face. Remember that the needs of each group differ. A plan sponsor overseeing a 457 plan doesn’t need the same things as a franchise owner. Appeal to your target group’s specific concerns and offer a potential solution. This will set you apart as knowledgeable, specialized and indispensable. Explain precisely what you will do for your target plans. Avoid a long description of everything you do; instead, create a succinct summary of the value you offer. Essentially, step 3 attempts to solve the problem you identified in step 2.

4. Get the next appointment. After you have had a preliminary meeting, what can you offer that will help you stand out from the crowd? What will generate the next appointment? At AllianceBernstein, we use Retirement FastTrack as a great engagement tool. It allows you to gather answers to a few simple questions and then provide plan sponsors with “Raising the Bar,” a customized benchmarking report that compares their organization’s retirement plan with other plans nationally. Review the report with a plan sponsor, show how the plan stacks up, and help clients close the gap where needed.

5. Continue to add value. Once the plan sponsor becomes a client, how will you continue to add value? Effective plan reviews can be the answer. They allow plan sponsors to gain confidence in investment strategies and plan design and enable you to deepen the emotional connection with plan sponsors. During the regular review, you can ensure suitability of service providers while you understand plan sponsors’ needs and expectations and uncover changes in plan sponsors’ businesses or additional assets and opportunities.

Together, these five steps are the starting point for you to stand out from the crowd and differentiate yourself in the sea of advisors in the retirement services industry. The key to successfully growing your business is to constantly evaluate and adapt based on what you learn about yourself, your competitors and your clients. Don’t be afraid to go back to the beginning and refresh your approach. As Plato said, “The beginning is the most important part of the work.”

Ken Haman is the Managing Director at the AllianceBernstein Advisor Institute, visit http://ria.alliancebernstein.com.


Register or login for access to this item and much more

All On Wall Street content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access