Don’t Deride DC Dabblers

Ever heard the term DC Dabbler?

A DC Dabbler is an Advisor that goes out and builds a network of relationships.  They serve their network every day, and every 12-18 months someone in their network needs help with a 401(k) plan.

The nick-name Dabbler simply refers to the fact that the Advisor generates revenue from multiple sources other than 401(k) business, and most are not actively prospecting for 401(k) plans.

Are DC Dabblers a fringe group of Advisors?  We don’t think so.  As of January 2019, 95% of Advisors with one of the largest broker dealers in the country are DC Dabblers.  So this is not a fringe group of Advisors to overlook.  DC Dabblers have relationships with decision makers and get the call when a plan is started or improved.

The DC Dabblers we talk to want to be as effective as 401(k) specialists.  They do this by leveraging trusted expert service provider partners like TPAs and recordkeepers to help them build best-in-class solutions for clients.

And this is where we see an opportunity shift in the 401(k) retirement plan market.  Historically service provider partners focused their time, efforts, and resources on 401(k) specialists (5%).  In passing, DC Dabblers were handed a business card and asked to call when they have an opportunity. Tools created to help the 401(k) specialists might be offered but are not what the DC Dabbler needs to move opportunities forward.  So the entire exchange is a low to no-value exchange for everyone, the DC Dabbler, the sales rep and the client they serve.

Service provider partners willing to create and provide the tools DC Dabblers need to close, create or qualify an opportunity, prepare a winning sales presentation or provide service activities for the 401(k) plan will create a new channel of referrals and sales for their product or services.

We applaud the work DC Dabbler Advisors are doing to positively impact employees and employers.  It’s a team effort that serves everyone.

Job well done!

Andy Hudson, Step Strategic Marketing, andy@stepstrategic.com

Chris Barlow, KnowHow 401(k), cbarlow@knowhow401k.com

Golden Anniversary of My Paper Route

50 Years Lessons Learned

I’ll never forget the day in 1969 when my Mom told me that she had arranged for me to become a paper boy.  It wasn’t my idea to spend less time playing and become more responsible.  I was eleven and my Mom had five other kids in the house.  She was looking for ways to keep us busy.  When I sold my route two and a half years later I had doubled deliveries and revenue.  I learned many lessons fifty years ago that still apply today.

  • I learned that I had within me the will to succeed. I didn’t know during the first couple of days, and especially the first Sunday if I could physically do the job. After early assistance from my older brother and ongoing encouragement from my parents, I learned that I could do the job by myself.  And from then on it was a matter of continuing to show up. This laid the foundation of all of my future successes.  The feeling of accomplishment and freedom was and still is addictive.
  • Your customers complain if you don’t deliver.
  • If you don’t collect you don’t get paid. And it was OK to be aggressive with late payers.  I paid for the papers before delivering them.  I was going to get my money.
  • Persistence allows you to improve, make work lighter and build a successful business.
  • It’s always good to be the guy with money.

After being a paperboy I went on to be a school janitor, shoe shine boy, dish washer, landscaper, liquidator, Financial Advisor and then a series of 401(k) marketplace sales positions.  All positions taught me lessons but none provided more than my paper route.  Thanks Mom.

Christopher H. Barlow

Managing Director

KnowHow 401(k), LLC

cbarlow@knowhow401k.com

January 2019

 

©KnowHow 401(k), LLC

Let All Save

Let All Save

I believe that personal capital fuels one’s passion to accomplish their goals.  I believe all workers should have access to a payroll deduct retirement plan at their employer to use to accumulate their personal capital.  There should be as few obstacles as possible for workers to save and accumulate their personal capital.

Typically, a for-profit employer will sponsor a retirement plan only after a period of time proving that they have what it takes to stay in business.  And the first employee benefit plan they normally provide is a health plan.  Sponsoring a retirement plan could be years after.  Since 1974 all individuals have had the ability to save through an IRA.  But if we want to maximize the national savings rate, we need to encourage the implementation of workplace payroll deduct retirement plans to best promote workers accumulation of their personal capital.

Based on the Bureau of Labor Statistics’ National Compensation Survey for 2017, of the 116 million full and part-time private sector workers, only approximately 50% of them have access to a workplace retirement plan.  I believe that free markets ultimately fill any void where there is a legitimate need, even overcoming set-backs.  The States of Illinois and Oregon continue to roll-out their programs to fill the void for their citizens that are not covered by a workplace payroll deduct retirement plan.

Illinois Secure Choice

The State of Illinois requires employers with at least 25 employees, that have been in business for two or more years, and who do not currently provide a workplace retirement plan, the option to either adopt a private market retirement plan or automatically enroll their employees into the Secure Choice program. The Secure Choice pilot program began in May of 2018 and full program rollout will begin in November 2018.  An estimated 1.2 million Illinois workers will gain access to a workplace payroll deduct retirement plan through Secure Choice.

OregonSaves

All Oregon employers that do not sponsor a workplace retirement plan must facilitate the OregonSaves program covering over 1 million workers.  The program is being rolled-out in phases based on the number of employees at the company without a workplace retirement plan.  Employers with 100 or more employees began to implement the program last November and employers with less than five employees have until May 15, 2020 to enroll in the program.  The Oregon State Treasurer has filed a notice that would create an option under which any Oregon citizen, employed or not, could participate in OregonSaves.

These two state programs provide a way for all of their tax paying citizens to have access to a workplace payroll deduct retirement plan.  I believe they realize that someday many of the participants will have the personal capital to launch a new business and employ fellow citizens.

Chris Barlow

Managing Director

KnowHow 401(k), LLC

www.knowhow401k.com

cbarlow@knowhow401k.com

September 12th, 2018

THE PROSPECTING FLOW: The Discovery Meeting

THE PROSPECTING FLOW: The Discovery Meeting

#4 Profiling

Past articles in the Prospecting Flow series discussed starting the conversation with a 401(k) prospect plan decision maker, posing your initial questions to confirm the research you have on the plan, managing their objections and obtaining their opinion on improvements for the company 401(k) plan.  You are now able to decide whether to move forward with them and set up the Discovery Meeting.

The purpose of the Discovery Meeting is to continue the process of understanding what you need to know about the company, the employees, and the 401(k) plan to enhance the probability of being selected to serve.  Your objectives to accomplish during the Discovery Meeting include:

  • Show your value-added service with your Positioning Presentation.
  • Ask questions and solicit quality responses to fully understand the decision maker’s goals for their plan.
  • Develop a thorough understanding of the hurdles and or objections that you will have to overcome during the upcoming sales presentation.
  • Answer any questions the decision maker asks about you and the services you can provide.
  • Schedule a follow up meeting to present your recommendation, a sales presentation if appropriate.

Conduct the Discovery Meeting at the employer’s location.  By being on location you will be better positioned to gather other information besides the answers to your questions. You can review their office walls for family pictures, diplomas and awards.  You will certainly gain a clearer understanding of them and their company by visiting them.

There are four categories of Discovery Meeting questions to get answered.

  • Plan Demographics
  • Plan Operations
  • Plan Investments
  • Plan Service

I encourage you to end with plan service questions because service is what you have most control over.  By asking the Discovery Meeting questions you will learn about problem areas and features other Advisors may have spoken to them about that they are interested in.

Final questions posed can include a trial close.  You want an understanding if the prospect plan decision makers will move forward if they are presented with a better option.  You are not in the proposal publishing business.  Here is a sample trail close question, “You have provided a great deal of information, with plenty of opportunity for me to suggest improvements when we meet next. If after our next meeting you agree that my recommendations will provide the 401(k) plan that works better than your current plan will you be at a point where you are ready to make the upgrade?”

And a final question to ask as you conclude the Discovery Meeting seeks their assistance setting up the agenda for the next meeting when you will present your recommendations.  Ask, “Prioritize for me what will be important to discuss at our next meeting when I present our recommendations.  And if necessary, “Would all other decision makers agree on that prioritization?”

As you close the Discovery Meeting ask for a copy of their 408(b)(2) Fee Disclosure Form and an Enrollment Kit which includes a Summary Plan Description and investment overview.  A thorough Discovery Meeting enhances the probability of serving the plan.  Look for the next article in the series, when I’ll review the Sales Presentation Flow.

Continued success.

Christopher Barlow

Managing Director

KnowHow 401(k), LLC

www.knowhow401k.com

June 2018

7 Reasons Why Cold Calling Is Still The Best Way To Contact 401(k) Plan Sponsors, And Why You Should Do The Calling

7 Reasons Why Cold Calling Is Still The Best Way To Contact 401(k) Plan Sponsors, And Why You Should Do The Calling

Besides being given a plan that you would have otherwise pursued, I believe of all available ways to connect with your target 401(k) plan prospects is by using the telephone and cold calling. Cold calling is not dead, not even a little bit.  If cold calling were dead – why are there lead firms willing to sell you leads of 401(k) plans they cold called?

And I believe that owners cold call best. Whether you are the team leader or solo Advisor, you are an owner.  And owners like talking with owners, key executives like talking with owners.  These are the seven reasons why I believe cold calling is the most effective form of growing your 401(k) business where you control your message and pursuit of plans that make sense to you.

  1. I believe you are responsible for making the first impression with a target plan prospect. When either you or someone from a lead firm initially connect with the prospective decision maker, according to Dr. Amy Cuddy* the prospect immediately asks themselves two questions; 1. Can I trust this person? 2. Can I respect this person? Who do you want responsible for the first impressions with the prospect? A caller you hire will not be able to communicate your value better than you.
  2. It is a small amount of time – 30 minutes to two hours a day based on your goals. It’s daily “exercise” to grow your business and accomplish your goals.
  3. Your experience is a differentiator in the marketplace. The longer your length of service the greater distinction you can make between yourself and your competition. And your competitors may consider cold calling too difficult, ineffective and demeaning.
  4. Calls can last longer because the decision maker can hear your passion and focus to assist them and their employees to achieve their goals with the company plan.
  5. On the phone you can reach as many potential plan prospects in 1 or 2 hours than the more expensive ways of buying leads, buying lunch for referral sources and time to cold walk and drop by target plan prospects.
  6. Telephone prospecting relays your value and is measurable. And you can quickly determine the quality of the prospect and whether to continue to pursue them or not.
  7. If the 401(k) conversation isn’t going well, you can pivot to discuss the most important company or personal financial need they have at the time.

Even if the decision maker doesn’t take your call, leaving a quality voice mail, month after month demonstrates your persistence. Persistence is easily recognized by the decision maker because it is a quality they admire about themselves.  As you continue to call they will reward you and take your call.

Cold calling is just one activity you can execute to process Cold prospects. I strongly encourage the development of a referral network with your continued success.  Educate your referral sources about the plans you are pursuing and ask them who they know at each.  But unless you are overwhelmed with qualified referrals, I believe a part of your day should be spent processing Cold plan prospects and the most effective way of doing that is cold calling.  Smile and dial.

* Dr. Amy Cuddy, Psychologists, Harvard Business School. Book, Presence.

May 18th, 2017

Do You Buy 401(k) Sales Leads?

Do You Buy 401(k) Sales Leads?

I don’t dispute the opportunity for lead companies to operate and sell appointments to 401(k) Advisors. Advisors tell me they buy appointments because they want to grow their business and it is a cure for their lack of time or desire for cold calling. I know of abuses over the years committed by unscrupulous lead firms and their sales people.  But several Advisors have told me that although each lead doesn’t pan out, they have had enough success to continue to order leads.

I personally do not believe that it is necessary for Advisors to purchase 401(k) sales leads. My opinion is based on the minimal amount of time it actually takes Advisors to systematically approach plans and the additional benefits they receive.  To start with owners like talking with owners.  Advisors may uncover additional opportunities and they can brand their firm with the prospect with each attempt to speak with them.

Most Advisors I work with spend no more than 3 to 5 hours per week calling and dropping by plan prospects. I don’t believe any appointment service can match the passion and experience prospects hear in their words.  Dr. Amy Cuddy is a Harvard Business School professor and she and her colleagues have been studying first impressions, or in the context of growing a 401(k) business, the initial contact with a cold plan prospect.  Dr. Cuddy and her colleagues have found that when you and your plan prospect first meet over the phone or in person, they are going to quickly ask and answer to themselves two questions.  1) Can I trust you? and then 2) Can I respect you?

Focus on the few prospects that make sense for your business. Be responsible for the first impression with the decision maker.  Open a line of communication to serve their company retirement plan and any other company or personal financial issue they may have.  Save your money for other meaningful business building initiatives.

March 27th, 2017

Are You Ready To Answer These 8 401(k) Plan Fee Questions?

Are You Ready To Answer These 8 401(k) Plan Fee Questions?

“Prepare for adverse weather conditions”

A football coach of mine uttered as part of his pre-game pep talk, “prepare for adverse weather conditions” as we faced a weather quagmire. He wanted to encourage us to understand our obstacle and to stay focused on the task at hand.

Below is a list of eight questions focused on how much money you may make and possible perks of the 401(k) profession. A prospective or current client could ask these and more.  Are you ready to answer them?  Are you ready to explain and defend your answers?

  1. How much money will you make in a fee or commission if we select you and your recommendation?
  2. How much will you make as an ongoing fee or trailing commission?
  3. Is there a bonus you are eligible for that comes as a result of our selection of your recommendation?
  4. Are you earning more from this recommendation than you might from putting us in a similar product from a different company?
  5. Is any company that is part of your recommendation running any contests that might lead you to getting a free trip if we select your recommendation?
  6. Do any of the companies that are part of your recommendation offer “due diligence” trips or provide you with other forms of payment, say in points that you might redeem for merchandise?
  7. Do any of the companies that are part of your recommendation provide free food or tickets to sporting, concerts or other social type events?
  8. Finally, does your firm stand to collect any fees that you yourself will not share in as part of your commission because they have favored one product or another or limited their platform to certain products and locked out others?

Your answers can vary based on if you are serving as a Registered Investment Advisor or Registered Representative. The first two questions can be verified via fee disclosure forms.  All questions posed by plan sponsors and plan participants need a clear and concise answer.  You may believe that your responses will upend the sale.  You’ll see otherwise when you deliver honest and complete answers.  Prepare yourself for anything and stay focused on your task of managing and growing your business.

*Questions adapted from, “The 21 Questions You’re Going to Need to Ask About Investment Fees”, Ron Lieber, NYTimes.com 2/14/17

March 2nd, 2017

The Ghosts of Business Past, Present and Future; 401(k) Advisor Year End Reflection

The Ghosts of Business Past, Present and Future; 401(k) Advisor Year End Reflection

Perhaps you’ll find a little time over the next several weeks to reflect upon how you have progressed over the years. You can summon thoughts of your past and present activities and use them to alter your future business.

Here are a few questions to structure your thoughts and help make 2017 what you want it to be. Think of it like Scrooge’s journey reflecting Christmas’s past, present and future as you interview yourself.

  • Thinking back to the early days of building your business, what would you do different? What should you continue doing?
  • How do you answer the prospect plan sponsor’s question, “Why you. Why are you different / better than our current Advisor and all others prospecting us?”
  • What do you want to improve about your business in 2017 and beyond?

Scrooge found the collective experience life changing. I suspect the impact can alter your business for the better.  No humbug here.

Happy Holidays and Continued Success in 2017!

December 15th, 2016

By Helping Others I Can Accomplish Anything

By Helping Others I can Accomplish Anything

I am fortunate to work with successful 401(k) Advisors. When speaking with them about their business plan and marketing materials, it is evident that many of them succeed because they strive to accomplish a greater good.  They entered group retirement plan sales with a belief that they could build a solid business over the years serving 401(k) plans.  And they were going to build their business driven by a desire to assist others to accomplish their goals.  Their passion and focus is not only evident to me, I know it’s picked up by their prospects and understood by their clients.

I developed a personal mission statement based on years of experiences that reflects the passion I witness from many successful 401(k) Advisors. The statement is, “By helping others I can accomplish anything”.  And like those successful Advisors, I hope to succeed as a result of accomplishing a greater good.  My personal mission statement clearly explains what’s important to me and that which I want others to know about me.  It provides me a point to focus on and work towards.

All that I have accomplished and all of my future successes will be based on delivering on this statement. I don’t publish my personal mission statement for viewing by prospects or clients.  My actions will speak louder than reading the words, as they say.  Just like many successful 401(k) Advisors.

November 11th, 2016

They’re Taking My Call

They’re Taking My Call

I have a monthly call with Advisors that I coach. At this time of the year I hear those who have persistently attempted to contact prospective plan decision makers say, “They’re taking my call.”  They persisted with their attempts to contact cold prospects month after month, leaving a lot of voice mail messages.  Advisors will tell me that as they launch into their opener the prospect plan decision maker will stop them and say, “I know who you are.  You’re the person that calls me once a month.  I know who you are.”  Prospective plan decision makers are taking their call to reward them, and they know that this is the time of year to decide to make plan improvements for first of the year implementation.

Plan decision makers, whether they are owners or key executives of companies share certain characteristics with successful Advisors. One of those is persistence.  Your prospect plan decision makers continue to exercise their persistence on a daily basis.  In the absence of a relationship, plan decision makers will take your call to reward you for demonstrating a characteristic that they hold near and dear about themselves.

January 1st of any given year is a favorite time for employers to introduce or improve a qualified plan.  Accounting has a clean start and the employer can promote to the employees a “new year – new (or improved) benefit” perception. When you take over a plan, the employer and employees have gone through at least one transition when they began the program, plus any other past plan conversions.  The plan decision makers realize that a best practice is to make sure that they give themselves time to communicate to employees and manage the process.

Carry-on with your acquisition activities this selling season. Focus on your prospecting process, not how many conversations or meetings you have with plan decision makers.  Those will come with your persistence.  Your efforts will be recognized and rewarded by plan decision makers as they continue to take your call.

August 2016