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Start Looking for Year-End
Conversion Business Now
AS
WE SIT in the heat of August thinking about the end
of summer, children going back to school and football,
January 1 may seem a long way off. However, if you are
looking to be involved with 401(k) or 403(b) conversion
plans, you need to be starting your prospecting process
now. Salary deferral retirement plans such as 401(k) and
403(b) plans typically operate on a calendar year basis
(with some exceptions), and January 1 will be here
sooner than you may realize.
Sell
your services
As
outlined in the 401kExchange Opportunity Index, plan
sponsors looking for improved service and performance
don’t always need new providers. Rather, they may need
new advisors that can bring them value-added services
they may not be getting. Advisors using this approach
are winning new clients using Broker of Record changes
which may or may not lead to provider changes.
Advisors need to approach these prospects not as a
product provider, but as a service provider that will
help plans operate more efficiently and limit the
sponsor’s fiduciary exposure.
For
advisors selling their services, two things are critical
for success. The first is a proposal of the services the
advisor will provide for the plan sponsor. The second is
a written service agreement. When a written service
agreement is in place, expectations are established and
roles are defined. This approach can prevent future
misunderstandings and make the relationship between the
advisor and plan sponsor more closely aligned. The
agreement also establishes value of the services for
which you are being paid.
Planning for new providers
In
some instances, you may conclude that a plan sponsor
needs to change providers to get the results they are
seeking. In this case, you need to approach them with a
timetable leading up to January 1. The year-end sales
cycle for a plan changing providers looks like the
following:
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August/September: |
Identify prospects and set appointments. |
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Early September: |
Collect data and do analysis to determine plan
sponsor needs. |
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Late September: |
Present recommended course of action. |
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Early October:
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Implement action plan, including vendor
negotiation or search, if appropriate. |
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Late October:
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Present final recommendations to plan sponsor
and agree on implementation steps and time line. |
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November:
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Prepare participant communication strategy. |
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December:
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Hold participant communication meetings, notify
both providers. Arrange meetings between vendor
implementation staff and plan sponsor to outline
data exchange and conversion timeline.
Distribute blackout notices to participants. |
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January:
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Remit first deferrals to new provider.
Coordinate the liquidation and transfer of
existing balances to the new provider. |
Don’t
wait for another calendar page to flip. Whether plan
sponsors
need a new provider or just improvements to their
existing platform,
you can find yourself well-positioned to gain additional
business if you start prospecting today.
Headquartered in Bellevue, Wash., Symetra Financial
Corporation provides retirement plans,
employee benefits, life insurance and annuities through
a national network of independent advisors and agents.
For more information, visit
www.symetra.com.
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