COLD CALLING SMALL BUSINESSES FOR SEPs AND SIMPLE IRAa

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jdFA's picture
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Joined: 2013-08-08

Hey guys, been trolling on here, this is my 1st post. Love the content, very motivating. I'm starting a straightforward SEP and SIMPLE cold calling campaign with small businesses in my local area being that tax season is right around the corner. Figure it's always a good time to talk tax deductions with SBOs, but none better then these next few months.

Script will roughly be "Hello Mr. SBO, this is Yourfavoritebroker at a Firmyoucantrust. I help SBOs just like yourself reduce their tax liability by opening SEP and SIMPLE IRAs. "
If "yes, I was just thinking about how I needed to do that" - then i'll close for an appointment.

If "no way, I don't take solicitations" - On to the next one.

If "maybe, tell me more." - I'll roll about the cost efectiveness and simplicity of those retirement plans. I'll try and close for the appointment after, if not, I'll send info, follow up, and move on.

You guys know the drill.....what do you think? I know getting past the gatekeeper will be rough, so please don't inundate this thread with gatekeeper talk. I will be going old school, calling right out the phonebook. Just scrub and call baby. Keep you guys posted on the results weekly, I'll be mixing in residential cold calling, and I have a seminar lined up with a CPA that I've been forging a relationship with. Anyone want to join and update results is more than welcome.

I'll leave you all with the first thing my mentor told me when he brought me into the business. "Life's great when you bring in the assets"...boy is he right..he has just under a $100 million book all in recurring revenue. Only does C share, managed money, and VA business..dude comes in, counts his trails, fields hand holding calls with clients he's had for almost 2 decades, and plays solitaire, and STILL brings in about $8 million annually in revenue from clients bringing him more assets and referrals...it's an unbelievable thing to see. GO GET EM BOYS, THEY'RE OUT THERE!!

jdFA's picture
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Joined: 2013-08-08

$8 million annually in assets***** not revenue...my mistake

Paranoid Android's picture
Joined: 2013-09-26

Love it, this is the route I go too...business to business. Will warn you, the SIMPLE IRA deadline is October 1st for this year...so that boat as already passed if you're looking to get in the door before tax season.

One thing to bring up with any business retirement plan is how "sticky" it makes your best employees. They don't want to lose their top talent, retirement plans keep them around.

When talking to the business owner, it's "Only 3%," when talking to the employees it's "You get 3%!"

Just remember to always be complimenting a business owners success, always let them know that they're different than the normal person, and always be telling them how this benefits them.

Looking forward to seeing your success...unfortunately we caught this place later than we should have, but there is still some serious gold when you go through the old pages.

jdFA's picture
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Joined: 2013-08-08

Good call on the October 1st deadline. Looks like I'll have to be leading with SEPs. Hopefully they don't get turned off by the required contributions for all eligible employees, but a SEP is a great way to get your foot in the door with a small business owner IMO, and should make for an easy segue into uncovering other assets.

Paranoid Android's picture
Joined: 2013-09-26

Absolutely...the key for all eligible employee contributions is just making sure they know it's a way to reduce their tax burden and make sure you put emphasis on just how small of a contribution it is. "Reduce your taxes, keep your best employees from going elsewhere, and it's ONLY 2%"

Upsell to employees downsell to owners.

Many already have something, ask them if they're getting the service they *deserve*

Don't get discouraged with Business owners, many have something and are completely happy with it....so you'll get just as many if not more no's, but the yes's are so fruitful. I read a stat once, business owners have 7x the assets....so if you get a SEP, you're getting their assets somewhere down the road, PLUS, you are the go to guy for their employees. Don't ignore the employees.

jdFA's picture
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Joined: 2013-08-08

Good advice. I always thought small businesses that the FA community generally ignores like beauty salons, mom n pop pizzerias, etc are a great way to get volume. I know the assets are likely to be less, but my thinking is opposite of what the major brokerages are pushing. The Merrill's, UBS's, Wells' of the world are pushing big accounts and less clients and wants us to forget about the little guy..my mindsset is the opposite..i'd rather have 100 $10,000 accounts than 10 $100,000 accounts..more opportunity for referrals and when u have a few big accounts losing one or 2 could substantially hurt your revenue. Thoughts?

Paranoid Android's picture
Joined: 2013-09-26

Where are you working? I ask because A. if your payout is low, you'll starve that way and B. Most companies will have hurdles you'll have to hit which is tough with smaller accounts. Even EDJ will give you the whole "we've got your back and support you" but if you're not churning or putting everyone in A share mutual funds your first year, see ya later.

I had the same mentality when I started, the funny part about it all. The small people are the most stubborn and reserved. They don't ever want to talk finances, the big guys? They'd love to tell you about the 100k they have at the bank not doing jack shit for them....it's almost ironic, the people that probably need the help the most are the most resistant to it.

Just want to give you that warning, it seems like a great niche because it is a market that is relatively ignored, and there certainly are some diamonds in the rough...but overall it can be tough because of that resistance.

jdFA's picture
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Joined: 2013-08-08

I was brought into the business by someone who transitioned from the wirehouse to the independent channel, don't want to say the firm because I want to remain as anonymous as possible obviously, but it's one of the big boys. Because he brought me in under him I don't have to hit performance numbers like the wirehouse guys, HE is my branch manager and takes a piece of the business I do. He 'showed me the light' in regards to recurring revenue, which is the industry's best kept secret, and only lets me do C share, managed, or annuity business. If there's a 1% trail on it, I can use it, if not, no thanks..I won't lie, it's a pretty sweet gig as long as I can steadily bring in assets. Because he keeps me accountable as far as my discipline with recurring revenue I know I'll be forever grateful 7-10 years from now when I have $350,000+ in trails because I never put the money into A share or high up front commission products. But for nw, I'm making significantly less than what I would be making if I DID front load my commissions. Today's easy, I'm building my book for tomorrow, or at least, that's how I look at it.

jdFA's picture
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Joined: 2013-08-08

By the way, that was a very good point you made in regards to the difference between the people with money as opposed to the people with less. It is just so tempting to swim in a pond where I don't have to worry about competition as much because all the high income areas are riddled with brokerages. I guess I'll mix in both. As long as they have at least $25,000 that I can put into C shares I'll be fine with that because mixed in there will be some $99k-$249k accounts and a few $250k+ as long as I keep my activity level up on a 24/7 basis and continue to build my relationships with CPAs and attorneys, which I am.

jdFA's picture
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Joined: 2013-08-08

Paranoid - I don't know how familiar you are with the wirehouse side of the business, but like I said, I was brought in to the business by a family friend that was already in the independent channel when he brought me in...so my question is, How do the wirehouse guys bring in assets at the very beginning? Are they given a few dormant accounts within the wirehouse that nobody wants, either because it is too small of an account or a problem client? Or are they not given jack like me on the independent side because without wealthy family and friends I don't see how I or anybody would survive 100% on their own and accountable for bringing in the assets and the amount of accounts at the very beginning that they require you to open to avoid being fired for lack of production. I heard from a wholesaler that one of the big brokerages tells their rookies that they have to open 20 accounts in the first month or they're fired! That's INSANE! Who could survive that without being given a few accounts for some breathing room in the beginning...It's funny how the industry media heads talk about how there is no "young blood" in the retirement plan/fianancial advisory space and that it's an epidemic that there are very few younger guys coming into the business to transition the older guys out who are retiring..It's because all the young guys are failing out of the business and all the big guys take the scraps that you leave behind when they get fired. It's a vicious cycle that keeps the $1 million producers getting fatter and fatter, it's disgusting.

Paranoid Android's picture
Joined: 2013-09-26

Ahhh that's good that your independent because like you said, you don't have those nasty hurdles to hit, they definitely are tough.

I''ve been in talks with one of the big wirehouses so I can give you basically what I know from that. I won't be starting from scratch but I've been explained basically what happens when you do. You've got three options, you can start from scratch or if you're fortunate enough to get offered, you can either partner with a senior guy or join a group. From there, there's a chance you can service some smaller accounts or pain in the ass accounts. Sometimes you can take over a book from a previously failed advisor as well.

20 accounts in a month is definitely not a requirement, at least anywhere I've looked. You usually have 3 things they look at, Gross commission, fee based assets, and AUM. I know one guy, and I'm going to butcher explaining this, but he's planning on building his business with connections to a foreign government. If his business plan works out, he'll be all set with like 4 or 5 accounts a year and the wirehouse is okay with that. It's about the assets and commissions. Also typically, it's not a month to month thing but a 4 month thing. They may have had to open 20 accounts by their first hurdle?

It's a tough game, but if you can be one of the ones that makes it through, whether by luck, skill, or just grit and work...you'll be sitting pretty.

Only doing C shares is great no doubt...but do make sure it is what is best for the client. If you stick with the same fund company for 10 years, an A share would have been cheaper for them. I personally am a fee based guy and that's a big reason why I'm leaving where I am, because the fee based platform is so limited. I lay the options out to them, especially in an IRA where C shares can be a little iffy. I lay it out basically like "We can do A shares, where we pay the up front, have lower expenses going forward and it ends up being cheaper for you long term, or we can do C shares where there's nothing up front, a little higher expenses going forward, but we have more flexibility to jump from company to company."

They typically pick C shares anyways, cause no one really wants to be completely tied to one fund company..but they appreciate you laying out the options for them.

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