Grow Your Business

How To Win New Retirement Plan Sponsors? Referrals.

By Leila Martin

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If you’re looking to get in the door with retirement plan sponsors who don’t have a financial advisor or want a new one, the most important thing you can do is make sure you’re worth a referral from the clients you already serve.

Indeed, 90 percent of retirement plan sponsors find their financial advisor through recommendations from other plan sponsors, according to MassMutual’s 2016 Retirement Plan Referrals Study.

Furthermore, 93 percent of sponsors who do work with an advisor find them valuable – enough that nine in 10 would recommend them if asked.

Thirty-five percent of the plan sponsors in the MassMutual study asked for referrals to find their retirement plan sponsor. Another 23 percent received unsolicited referrals.

Some retirement plan sponsors conducted online searches for advisors, but to a lesser degree; only 10 percent of the study respondents said they look for advisors online. Of those plan sponsors searching online for an advisor, nearly three-quarters look first for one who works with companies like theirs.

Of the sponsors surveyed, some are working with advisors for the first time, while others are looking to switch. And why do plan sponsors go on the hunt for a new advisor? The top reasons provided by respondents in the study are:

- Bad advisor - 41 percent
- Lower costs/fees - 17 percent
- Better plan/investments - 7 percent
- Poor performance/returns - 6 percent
- Compliance/fiduciary responsibilities - 4 percent

The study shows that of retirement plan sponsors who don’t currently have an advisor, three in 10 have worked with one in the past and are more likely to work with one again in the future, especially during their scheduled plan review.

“Overwhelmingly, retirement plan sponsors are pleased with the support they receive from their financial advisor and are more than willing to refer their advisor to  other employers,” said Tom Foster, national spokesperson and practice management leader for MassMutual’s retirement plan services. “It’s a great opportunity for advisors who want to build their retirement practices.”

Referrals are a much richer ground for your business than just about anything else. Make the most of your network by staying involved with your plans and giving consistent, knowledgeable advice that puts your clients first.

And it’s not just about investments – according to MassMutual’s Winning Combination Study, sponsors primarily seek out an advisor for help with plan design and features before fiduciary obligations and investment selection. In an environment dominated by employee-directed retirement plans, you may also want to consider boosting your value by expanding your practice to include not just retirement advice but also guidance on a fuller suite of voluntary benefits.

First impressions are important, but there’s a big difference between pitching cold and going in with a seal of approval from someone your prospect trusts. By consistently bringing your best to your clients, you can strengthen not only your current business but also your potential for future growth.

The study, conducted by Greenwald & Associates on behalf of MassMutual, was based on a mid-2015 online survey of 565 plan sponsors.



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