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

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

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

My First Sale Paid Forward By My Great Great Grandfather

My First Sale Paid Forward By My Great Great Grandfather

You’ll never forget your first professional sale. Mine was set up 75 or so years before it happened.  I passed the Series 7 test on September 3rd, 1983.  The next Monday I began a long career of trying to contact people to manage their money.  I started without any formal sales training, a four inch wide directory containing individual or company contact information in the Dayton Ohio area and a lot of excitement.  After two weeks of focused, persistent dialing without speaking with one prospect, I wondered what I had gotten myself into.  And I thought about how I could do things better.

I am from a Dayton family that for generations owned several small companies and participated in the development of the area. So I made a list of family held companies in Dayton, those with multi generation family ownership.  I called them asking for the owner or President, and thanked them for what their family had done for the Dayton area, hoping that would spark a conversation.

Requarth Lumber was next on the list to call. Requarth Lumber opened their doors in 1860 and supplied Orville and Wilbur Wright the spruce for their early flyers.  Mr. Requarth took my call and the conversation went something like this.  “My name is Chris Barlow and I am with SJ Wolfe here in town.  We provide investment management services.  I am calling to introduce myself and to thank you for what your family and company have meant to the growth of the Dayton area.  My family has been in the area for generations owning several Dayton area companies, like the Requarth family.”

Mr. Requarth said, “Thank you. What are the company names?”  I mentioned the Gibbons side of my family, and he stopped me asking, “Are you related to Michael Gibbons, Sr.?”  And I said yes, that he was my great great grandfather.  He then said, “I want to open an account with you.  Your great great grandfather did all that he could do to make sure that we stayed in business in the early years and we will never forget that.”  My great great grandfather owned the plumbing supply company for the area and was the developer for several downtown building projects.

Paying forward is real and you may never see the benefits of your actions. My great great grandfather probably had no idea that one of his great great grandsons would someday be a stock broker asking a lumber contractor of his to buy some municipal bonds.  What he did was to operate his personal and professional life with integrity and made such an impression upon another that 75 or so years later I was rewarded for his actions.  I hope that with my day-to-day personal and professional actions that I pay it forward for a future member of my family and maybe assist their first sale.

June 1st, 2016

Cold Calling Is Like A Good Cup Of Coffee

Cold Calling Is Like A Good Cup of Coffee

Do you like coffee – a really good cup of coffee? I do. Dark roast and black. I have a collection of coffee brewing methods including automatic drip, Keurhig and French press. And now I deploy the simplest of them all – a mesh funnel and a beaker.

I put the fresh ground coffee in the mesh funnel that sits atop the beaker, slowly pour hot water over the coffee and let nature do the rest. It took me a few pounds of coffee to get the technique and proportions of coffee and water correct. But the results are excellent. And besides the cost of the funnel, beaker, ground coffee and water, it is the least expensive way to drink coffee. Simple, low cost and I control the process – when I have the time to do it.

Cold calling is the simplest, lowest cost and most controlled approach to marketing you can deploy, when you make the time to do it. Advisors are naturally hesitant to cold call at all lengths of service, but the ones that progress get over that. Cold calling is one of the ways to grow your business –   not the way. But it is the simplest, lowest cost alternative and you control things.

If the term cold calling turns you off – change it to target prospecting. You define who you want to approach and when it is good for you to approach them. The important idea is to stay in front of them monthly until you speak and determine if you want to continue to pursue them. Simple, low cost and most control. Great combination for growing a group retirement plan business, let alone brewing a good cup of coffee.

January 19th, 2016

Close the Sale: TPA and Advisor Joint Service Model

Close the Sale: TPA and Advisor Joint Service Model

The best sales presentations I ever participated in as an Advisor were those where all members of the sales team; TPA, product Wholesaler and myself were in-tune with each other’s message and effectively communicated to the plan sponsor how we would work in concert to serve them and the plan participants.

I encourage TPAs and their Advisor partners to create a joint service model which effectively communicates to the plan sponsor and the plan participants the activities delivered to them throughout a given year. The calendar is the structure for your joint service model, because both your firm and the Advisors activities are calendar based.

Meet with your Advisors, and ask them to outline their specific initial and ongoing service activities with frequency, including:

  • Initial Trustee Meeting
  • Develop Investment Committee
  • Develop Investment Policy Statement (IPS)
  • Develop Education Policy Statement (EPS)
  • Employee Education: Group and One-on-One
  • Monthly Check-up Call to the Plan Sponsor
  • Quarterly Investment Management Reports
  • Annual Survey of Employees
  • Annual Trustee Meeting

Now combine the top activities you deliver for the plan sponsor throughout the year with those listed by the Advisor. Customize the service model based on information gathered during profiling. The written version is then combined with a visual calendar highlighting dates or periods with the service activities you each are delivering throughout the year.

A joint service model can increase sales and retention of plans for both your firm and the Advisor. The better you and the Advisor can communicate your partnership and shared responsibility to serve the plan, the easier it will be for the plan sponsor to decide to hire you. Close those sales!

Contact me for a sample Advisor Service Model for use in building your joint service model, cbarlow@knowhow401k.com

September 17th, 2015

Welcome to Selling Season!

Welcome to Selling Season!

Whether you are Product Manager, National Sales Manager, Wholesaler or Advisor the four month period of time from July thru October is the time you make your numbers for the year. Employers are most inclined to improve their company retirement plan for January 1st, 2016 at this time of year we call the Selling Season. Employers seem to be conditioned and comfortable discussing a retirement plan improvements now for the 1st of the year implementation.

Plan sponsors with a calendar year end plan are more aware of their company retirement plan at this time of year because Form 5500 is due by July 31st, (unless a 2 1/2 month extension is sought).  And if the plan has over 100 participants the plan audit is being finalized to attach Schedule H to their Form 5500.

This is the time of year for all prospect facing sales professionals to continue to be in contact with plan decision makers. Hopefully you have been in communication with plan prospects over the past months and possibly years leading to this selling season. Those numerous communications prove your determination and make it easy for the decision maker to remember you. Prospects will still vacation over summer, but as each day progresses your persistence and timing can be most rewarded.

July 2nd, 2015