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1. It’s a pretty steep learning curve and a pretty crowded market. I think the biggest question to ask is why you want to go into the retirement plan space with the understanding a lot of time and effort will be required to serve the space well.
2. Contact some of the bigger recordkeepers who work with advisors - Fidelity, Principal, Prudential, Mass Mutual, Empower, etc. You can find their information pretty easily online. They will help you to better understand the industry and what you are working on.
3. If you want to have a brief call, I will be happy to give you my thoughts. I’ve been in the industry for 20 years and have over $1 Billion in Retirement Plan Assets. Just let me know.
No. I don’t do a lot of RFPs, unless I write them. Every time a current or potential client says they are going to perform an RFP, I always offer to provide a Sample RFP for them, which they can change in any way they see fit.
If I’m not writing the RFP, I am already at an immediate disadvantage because one of my competitors probably did. So, if I wrote the RFP, I respond, as I will already have most of the questions answered. If I didn’t write it, I probably won’t respond as, in my experience, whoever wrote the RFP has a very good chance of getting the business.
Understood. What then gets you in the door of such large plans, if you don't mind me asking?
1. DB Pension Plans - These have a direct effect on the Financials, and having the ability to help reduce expense and risk is highly valued by those companies that have them.
2. COLI and NQ Expertise - Being able to present creative ways to help Executives maximize their benefits and businesses to better attract and retain top talent and find options for them to invest the corporate assets is also helpful.
Simply put, if I am focused on helping the bottom line of the company and it’s executives (beyond just the 401(k) Plan), they are usually interested in having the discussion.
Wow Alpha, a billion? How big is your team if you don’t mind me asking?
Just a few of us in my office. So I am clear, we don’t do any individual financial planning, but we do work with DB Plans and Non Qualified Plans. If I were asked to describe a perfect client, they would have a $100 MM DB and a $100 MM 401(k) Plan. Once you have several of those, reaching the $1 Billion mark is a reasonable goal. That having been said, for most advisors who work with individuals, it takes a much larger staff and many more accounts to reach such an asset level.
Alpha, do you get most of your clients through winning RFPs?
Ive been getting recruited to join a team such as yours. How is the compensation broken down typically if a new advisor joins your team but has individual investors as majority of his book? Do you provide leads of current participants and take a % of any outside assets brought in? also, how lucrative is it to become a solely institutional advisor in your opinion? what's realistic?