401k Sales How to Land Big $$
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I currently work for a large 401k recordkeeper in a home office, client support role for 401k plans that each have $35+ million in assets. My company has no internal sales positions since we sell exclusively through brokers. I would really like to take my client experience and use it in a sales role.
1. What are good firms to work for where I can sell pretty much any vendor's 401k platform. AGE, ML, UBS?
2. Can someone who sells 401k plans please comment on how their experience is and the challenges and things that come up.
3. From working in the industry, I think performance of the recordkeeper and the service of the recordkeeper is one of the primary reasons plans make changes, has that been your experience?
4. What techniques have you used to prospect and close plans? 5. Are you doing fee based or commission based?Oh forgot to ask, can’t you avoid long lead times on sales by just replacing another broker on the plan without changing vendors right away? Then you can still get paid while you conduct your search, if necessary.
Yeah,
You can just change the "Broker-Dealer of Record" and get paid the "trail" on the assets. You will essentially be the advisor for the plan and not have to change the vendor...Thanks for your help. What is the typical trail? I have heard it is usually about 25 bps, is that true? I have also heard that sometimes you get 1% on new assets.
joe I am absolutely LMAO good Lord the fact that Akkula didn’t get it makes it priceless. I personally am not going to respond to his questions because based on what he is asking he has no clue how to get a 401 (k) plan.
[quote=Akkula]
Thanks for your help. What is the typical trail? I have heard it is usually about 25 bps, is that true? I have also heard that sometimes you get 1% on new assets.
[/quote]
Akk,
Every plan is different. Some you get 1% up front with 25bip trail. Some you get nothing up front with a 75 bip trail, or 100bip trail (typically only group annuity plans). And there are all sorts of combinations in between. Most investment companies will give you options. You will also see different options based on how much cash you bring over from an existing plan (again, either larger upfront money with small trail, or vice versa).
I suggest you meet with at least 3 401K specialists. Maybe Fidelity, Oppenheimer, Hartford, American, and any others you like. Get to know their plans and how they work.
No offense Akk, but you have a long way to go. You need to really understand what you’re getting into before you just jump into it.
Akkula,
You have a problem. Your background makes you want to target 401(k) plans, but you took a job at ML. Because of the lead time involved with the 401(k) plans, and the need to quickly gather asset, going after this business will probably cause you to fail. To improve your chance of success, you probably want to table going after this business until after you have "graduated". Good luck to you with the new gig!I don’t think it would be wise to neglect other products and only focus on 401k plans. Because I have less experience in other areas, I have a more cloudy vision of the optimal approach to gather assets using other avenues. Thankfully, ML seems to have a top notch training program that will give me some of the other tools I need to be successful. I am hopeful that the recent market volatility will create opportunities for me to get in front of more people because they are unhappy with their account performance. I think I can spin my education and related experience to a prospect so that I don’t appear to be too “green.” I am happy, however, that I bring some related experience to this position. Most of the other newbies on this site seem to have zero related experience, zero work experience, and/or zero licenses.
Question: If you were starting off in the business and had to gather a lot of assets quickly what approach would you take? IRA/401k rollovers? I read the 500 day war post which is excellent, but I am wondering if a more focused approach could be better in certain circumstances. 500 day war seems to cast a wide net that would potentially land many small accounts. I have a feeling I am going to have to be in touch with prospects with larger accounts to be successful. Am I wrong? I guess I want to try to make sure that I targeting a qualified prospect on my cold calls/visits so I don't waste valuable time working with the wrong clients. On a side note, I think there are going to be some opportunities in NQDC plans as well as the new PPA safe harbor automatic enrollment plans that now have two year cliff vesting on safe harbor contributions.[quote=Akkula]
I have a feeling I am going to have to be in touch with prospects with larger accounts to be successful. Am I wrong? I guess I want to try to make sure that I targeting a qualified prospect on my cold calls/visits so I don't waste valuable time working with the wrong clients. [/quote] Your job is to get INK ON PAPER. That's it. The larger the account, the more competition you have and the longer it will take for the client to make a decision to go with someone new like you.Akkula, what are brokers going to think when their TPA is now their competitor? They may have someone “sign some paper” and now have someone else as their TPA.