How do I get my clients to budge on 401k in-service distributions?

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You need to deliver value or show something they don't have inside their current plan. Whether it's an annuity or investment platform, you need to show them why it's a critical component of their plan.

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Having it in front of you at all times isn’t a good enough reason to move it in my opinion. You have to sell the value you bring to having the funds with you, especially if the 401k is cheaper. Are you going to have better investment returns? Are you going to be able to diversify out more than the 20 or so options that are normally in a 401k? Are the funds going to be insured with some annuity rider? If you are adding value beyond “let me hold on to it for you” it shouldn’t be too much of an ask.

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Most clients don’t pay enough attention to their 401k aside from looking at total value. I’ve found success by taking the opportunity to educate. We talk risk tolerance and the correlation it has to volatility. Explain how the lengthy bull market has affected their overall allocations. Most are taking much more risk than they actually prefer - show them that and the affect it might have in various market conditions. Talk about protecting gains and reducing exposure to match their tolerance for market movement. Compliment them but highlight pain points by providing small doses of reality (2008). Point out the ability to mitigate swings, protect gains, rebalance, add guarantees, add or subtract cash balances, increase overseas/domestic large/mid/small cap exposure, reits, alternatives, smart beta etfs that have a good story, etc etc etc. First define your value, next be an expert at explaining it. Know why you do what you do and believe in what you do. Disclaimer, there are times when it makes he most sense to remain in the plan as well.

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I agree with the above posters. Stop thinking about having the info and focus on what the client will value. I've had success focusing on the risk. What type of 401k is it? If it's something where the client has stock options it should be a no brainer. Tell them to keep contributing and they will still have their 401k but you want to take some risk off the table and diversify into less traditional assets. Examine the plan - is it only index funds? Any Roth contributions? Talk about blending active and passive. Ask yourself if I were x client why would I and why wouldn't I? I don't use a lot of VA but can you lock him in at a high watermark ensuring that he has a protected balance? Where is he in respects to retiring? Might make sense if he has a lot of assets to pull out his equity exposure and work on getting him from a high asset allocation in stocks to just reduce it by 5% per quarter and sock away some cash. Go over sequence of returns if he's late in the game.

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We do a lot of In Service rollover business. Our best success is in the planning for clients. Get into some advance planning (usually gives you a reason or two), account specific allocation (not sure why more advisors don’t do this) heavy equity in retirement accounts focus on fixed income and liquidity in taxable accounts. Not only brings in the money but opens doors to long term conversations (bridge funding, Roth conversions, etc) that keep the clients around.

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What is your logic for the rollover? What are you doing with it?

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Incorporating it into their overall financial plan. Helps when I can have all the accurate info right in front of me at all times.

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