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Saturday, September 25, 2021

6 Best Practices For Reaching a Busy Plan Sponsor

We at Larkspur-RiXtrema know how difficult it can be to keep up in the retirement plan space. There are so many wasteful plans out there, and it can seem easy to reach out to these plan sponsors to point out these flaws to them. However, even with powerful quantitative tools at your disposal, the plan sponsors might still be hesitant to take your call and listen. At Larkspur-RiXtrema, we have built our software, 401kFiduciaryOptimizer, to help you do just that, but we also know that there is a bit more to the process when it comes to reaching out to these plan sponsors. We’ve put together a few strategies to consider when getting in front of these companies and how to successfully reach out to a busy plan sponsor.


Play the role of an educator. Make sure that the sponsor knows about their own fiduciary responsibility. They need to know what exactly is at stake when it comes to their own fiduciary liability. Try to focus on educating the prospect rather than just concentrating on the plan savings. While the savings can be a huge factor, it may not be enough on its own to convince a plan sponsor to take action. They have a fiduciary responsibility to their 401(k) plan and you can teach them how they could face private action with poorly managed plans. We are in an ongoing wave of lawsuits and there is a very real risk of litigation. Be sure to absolutely stress this to any plan sponsor.

With your tools, you can not only find a way to optimize their current menu based on low fee alternatives and diversification, but be able to do so continuously with Plan Monitor. According to Fidelity’s recent survey, 37% of plan sponsors are concerned about their fiduciary responsibility and is a reason they hire an advisor. One of our most successful users of the 401kFiduciaryOptimizer, Hector May of Executive Financial Planners says that “Many plan sponsors do not fully understand the level of liability they have when it comes to selection of plan menus, both from a regulatory and a fiduciary perspective.” You can let the plan sponsor know that they don’t have to stay up worrying at night about the company’s retirement plan because you’ll be constantly on guard against any potential problems or liability concerns.

Find the Right Person

One important point to keep in mind is the following: Plans will usually list a name and phone number on the form 5500. As you can guess, these people are frequently overwhelmed with calls. Most of the time, they are not the right people to make a decision about moving the plan anyway. Try to network on LinkedIn to find some way to connect with a decision maker. Typically that will not be an HR person, but rather a CFO, board member, or one of the business owners. When you reach out to them, create a 1 minute pitch, because decision makers in 401(k) plans are the most distracted people on the face of this earth, other than Wall Street traders perhaps.

Advisors who use Larkspur-RiXtrema’s 401kFiduciaryOptimizer can create a focused pitch with our savings report (See Video Here). You can focus the attention of decision makers on waste that goes into many plans. However, keep in mind that fiduciary duty is not all about expenses, there has to be a strong reasoning based on quality as well. Realistically, many expensive funds also have a poor menu track record, poor diversification, and other issues. Create a holistic, only on costs is not the right way to go.

Cast a Wide Net

Reaching out to as many plan sponsors as possible is crucial for finding someone to listen. Our 401kFiduciaryOptimizer’s Plan Screener has no geographic or any other kind of search limits. Don’t be afraid to expand your search radius or even the sizes of plans that you’re prospecting be they smaller or larger. Also, don’t hesitate to try to reach out to the smaller firms. Smaller plans may prove to be a useful and generally untapped audience you can reach. As long as the plan has more than 100 participants, it is generally possible get their full Schedule of Assets from their form 5500.

Even if they file a short-form without a Schedule of Assets, don’t be afraid to reach out to the firm and ask them if they would like to take advantage of a free analysis of their plan. 401kFiduciaryOptimizer users can send them over a sample report of a quantitative analysis of another example plan and then ask them if they would like the same done for their retirement plan. All you need is to ask them for their fund lineup if they want the same analysis. Once you receive a fund lineup from them, you can upload it to the 401kFiduciaryOptimizer so you can show these smaller plan sponsors how you can quantitatively optimize their plans.

Be Memorable and Deliver Your Message Directly: 5500 Contacts Are Usually Not Ideal

While mailing in your reports or letters is definitely a faster option for reaching a lot of people quickly and easily, don’t forget how crucial it is to meet the company and decision-maker in person. While getting past the gatekeepers at any company’s office can be difficult, try your best to drop off reports in person. Make sure that you are seen as a real person that is interested in helping and not just a faceless advisor behind a letter or phone number. Be an attention-grabber. Do everything you can to get noticed when visiting firms.

When you are going into offices, try to make sure the report you are leaving is as noticeable as possible. Another one of our most successful 401kFiduciaryOptimizer users, Wayne Titus of AMDG Financial recommends putting a big confidential stamp or sticker on the envelope so that the plan sponsor knows how important it is. He says to make sure it’s addressed personally to the decision maker. If it’s marked as confidential and addressed to a specific person, there’s a good chance you’ll be able to personally deliver it to the person addressed.

Stress the confidentiality of your report so that they will know how important it is. Make sure that it won’t just get thrown in the garbage or lost in a filing cabinet somewhere. Put the plan sponsor or responsible individual’s name right on the front. Find out the person you need to call and continue to follow up. Contacts usually listed on form 5500 are usually not decision makers and they are only a starting point for successful advisors.

Be Active in Your Community

Get as active as possible in your local community. Get your firm in local magazines and attend as many events as you can to make yourself known. Try to get recognized as a contributing community member that everyone has heard of. Get involved in local events and try to get your brand out there. Invite local companies to an event where you can offer an educational seminar to teach them about retirement saving and how you are able to help them reach their goals.

Many firms out there are looking for an advisor that cares about teaching them and their employees about financial responsibility and how to save for retirement. Demonstrate that you can take on that role. We know this is easier said than done, but attaining community-wide recognition is an excellent way to get plan sponsors to answer your calls.

The Long-Game

As you of course will know, getting a sale in the retirement space can be a long process. Getting a company to move over their retirement plan can be difficult and they can be stubborn to change. Keep going at it. Don’t be discouraged by the long sales process.

Here is some more data from the recent 2017 survey from Fidelity:

  • 38% of plan sponsors are actively looking to change their advisors.
  • 55% of plan sponsors agreed that a solicitation for plan business piqued their interest.

Companies that want to change advisors and will listen to retirement plan advice are out there, and we at Larkspur-RiXtrema are also always available to help out whenever possible. We know that it can be a hard business reaching out to those decision-makers. We hope that these tips combined with the 401kFiduciaryOptimizer’s unique software will help you to finally break down the door with firms to show them the kind of savings and solution to fiduciary responsibility you bring to the table.


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