Retirement Plan Advisors want to know what to say when calling down a prospect list of 401k plans, how do they turn their cold calling efforts into successful meeting opportunities? Try this:
Go through your normal introductions, but please try not to sound like some nervous stiff that is locked in a cubicle or some money-hungry suit and tie. Before you start calling, get yourself in the mode or the attitude that you are trying to help people. Be sympathetic to their situations, be normal and most importantly be yourself. You are helping people here, they just don’t yet know that they need your help. After your introductions ask them one very simple question, “Can you tell me how much you pay for 401(k) plan?” You will get a variety of answers, some will say they pay $2,000 per year, others might say they think it costs between 1 and 2 percent, some will even answer that their plan is FREE. The bottom line is that they really don’t know the total cost and that is exactly what you are trying to establish. They don’t understand that total cost is the investment cost + any asset based fees + hard dollar cost. Now, be ready to ask them a second more in-depth question around fees. Example: when they say that their plan costs $200 per month, you then ask “Do you know what share class of mutual funds you utilize?” or “Do you know if your plan has an asset based wrap fee?” You can explain to them that the industry can utilize a variety of share classes (A, C, T, Y, N, R6, R5, R4. R3, R2, R1, Institutional, Advisor) and that these different types of investments are really just tricky ways to generate more revenue. Bottomline is that the great majority of these prospects cannot explain to you the total costs associated with their plan, because they don’t know and they surely don’t understand. They need your help, because this state of unknowing is simply unacceptable.
Then you explain to them that if they would give you 15 minutes of the their time (face to face), you could with no strings attached, help them for once and all understand EXACTLY what it is that they are paying for their retirement plan. Now, remember….don’t do this in your Wannabe, Mr. Important, Smarty-Pants, Financial Advisor voice, do it in your authentic and genuine I am here to help voice and attitude. Let them know the truth, that you do indeed hope to impress them and that once they get to know you and better understand your ability to help them, that they may consider your services in the future. But that for now, this is a win-win for them. Something you are willing to do because it is the right thing to do and you enjoy meeting and helping people. It will be extremely time efficient and they will 100% walk away with a better understanding of their plan’s fees. Now here is the kicker, by the way/it just so happens, that a Plan Sponsor actually has a very serious responsibility to understand plan costs. They have to act in the best interest of the plan participants and they simply cannot fulfill this legal requirement without being able to fully understand the costs associated with the retirement plan they have in place.