How to Win 401(k) Clients and Influence People
Financial Advisor IQ
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An explosion of "micro" 401(k) plans is expected to create a big opportunity for advisors offering defined contribution plan services to clients.
Cerulli Associates has projected that the number of retirement plans with less than $5 million in assets is forecast to grow from around 600,000 to more than 1 million by the end of the decade.
Federal policy shifts, including those related to the passage of the Secure 2.0 Act, have made it easier for small businesses to offer retirement plans to their employees. And that has opened a door for financial advisors to serve these plans.
Working with retirement plans can also be a way for advisors to source new wealth clients.
A quarter of 401(k) plan participants surveyed by Cerulli said they found their advisor through their plan provider or plan advisor. Read more from Alex Padalka here.
The most in-demand services advisors can offer defined contribution plan clients are enrollment support, help evaluating service providers and managing vendor relationships, plan design support, and engaging with plan participants to offer financial education, financial wellness programs and assistance with fund selection, Ignites Senior Reporter Brian Ponte of FA-IQ sister publication Ignites writes.
"As advisors seek to offer a more personalized participant experience, 59% of retirement specialist advisors report their most frequent method of engagement with DC plan participants is one-on-one meetings," Elizabeth Chiffer, research analyst at Cerulli, told Ignites. "These financial wellness programs, education and coaching sessions help plan advisors garner more detailed participant data and build potential retail relationships."
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Plan participants have also sought more education from advisors around how legislative and regulatory changes may affect their retirement plans, Ignites Deputy Editor Alyson Velati reported.
Read more about the type of education retirement plan participants want from their advisors by clicking here or on the image below.
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