Is your 401(k) business being pressured by the competition? Here’s a way to expand and deepen your current relationships — and create opportunities with new prospects as well.
Intensifying competition for 401(k) clients has driven many plan advisors’ fees down lately, NAPA President Jeff Acheson says. “So now they’re asking, ‘What else can I do to develop more relationships and offer more services to my existing clients?’” says Acheson. “It’s about not being commoditized as an advisor.”
As an alternative, Acheson suggests that advisors think about adding work with nonqualified deferred compensation (NQDC) plans to their service model, as he has. “For advisors competing against other advisors for business, similarities don’t sell — differences do,” he says.
An advisor knowledgeable about NQDC plans can add another dimension, he says: Talking to existing and potential clients about utilizing a nonqualified plan as a way to better recruit, reward, and retain key employees, while also giving those key employees more opportunity to defer income and boost their saving for retirement.
“Think of the client’s 401(k) plan as a castle. By adding a nonqualified plan, I’m building a moat around it,” Acheson says.
Read more from the summer issue of NAPA Net the Magazine.
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