In today’s episode of “The Confident Advisor Practice Podcast”, a podcast from the Horizon Advisor Network, hosts Bill Bush and Chad Soileau talk about the retirement plans and 401 K plans for advisors. They discuss various company retirement plans, where most of which are 401 K plans.
• 02:35 – Bill mentions that they have about 75 company retirement plans. Most of those are 401 K plans, a few simple IRAs, and a 457 plan.
• 04:35 – They probably spend any given week 50 to 60 to 70% of their time inside that retirement plan space, says Chad.
• 06:32 – Bill shares some of the good things about getting into this sector. It does bring some value to those existing relationships where they can offer something that they have some knowledge and specialization in helping them.
• 08:24 - People have to get very competitive to attract new employees, unemployment being so low and the need for workers being so high that a lot of folks are looking at how do we attract, states Bill.
• 10:40 – Bill says, when we run into opportunities, oftentimes, it is a case of where a plan has an advisor and they're not present and they are not servicing the plan.
• 12:00 – Chad says, it's the opportunity to bring in a more diversified clientele, or to bring in a diversified revenue stream.
• 14:29 – Bill highlights that it is the time for commitment, especially if we build that practice and it becomes a real division where we have like 75 plans.
• 16:18 - We've got to know where those parameters are on Plan size and building pricing accordingly, says Bill.
• 18:40 – Chad states that there are those considerations that one needs to look at and it's one of those things with an advisor that they have to look at their business and say that the ROI on this is going to be what they want it to be.
• 20:15 – Bill mentions that in a start-up plan, there are no assets. One is starting from ground zero, and so in those instances, they will charge a project fee.
• 22:00 - Just have those conversations with companies that already have a plan and maybe are being under-serviced.
• 24:14 - One of the things they do have on the horizon website is a webinar they did for business owners. It's about starting a 401 K plan.
• 26:00 – Bill mentions that they do have a system here and it's important when they show this to potential clients, it's called the 401k Confidence System.
Three Key Points
1. Bill shares some of the other things one should consider if they're going into this to become a plan advisor - the time commitment and the willingness to say, “I'm going to do this and do this means education to the plans”. It means helping that plan sponsor fulfill their fiduciary duty which means quarterly monitoring of the funds, making sure that the funds are up to speed compared to their peers, and following the investment policy statement.
2. Bill mentions it is a lot to think through in terms of how are we going to service, how are we going to bring value, and whether we are appropriately pricing things to be competitive.
3. Bill shares there are other breaks to have automatic enrollment, those were enacted and boosted as a result of the securities act. There's other legislation being drawn up now that will even make it more beneficial for business owners to do that. So, it is getting a lot of attention on the national level, and for those types of things and just having that conversation is a great thing.
• “I came out of the healthcare industry and got licensed and part of my indoctrination with the horizon was to help Andy on the 401k side.” – Bill Bush
• “A lot of times in a company retirement plan, that employee the only advisor that they'll ever know, will be the 401k advisor.” – Bill Bush
• “Healthcare makes up about 30 35% of the plans we have.” - Bill Bush
• “Regardless of what your industry is, there's typically going to be a lot of opportunities.” - Chad Soileau
• “Other ways of attracting and retaining employees, especially key employees is Hey, have you guys considered a non-qualified plan?” - Bill Bush
• “Really all parties involved in them need to be up on the latest regulations and all that to make sure there are no surprises.” – Bill Bush
• “If you want these plans to be sticky, you do need to reprice them.” - Bill Bush
• “When we have initial conversations with plan sponsors about us servicing the plan, and that can mean a lot of things.” – Bill Bush
• “You start with one or two small plans and then that in itself usually gives you the opportunity for other plans.” - Chad Soileau
• “That annual fee can be a part of the of what you get the tax break on it.” - Bill Bush
• “Set yourself apart. Try to find ways that make your story unique.” - Bill Bush
Call the Horizon Financial Group: (225) 612-3820
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