4 Ways for Financial Advisors to Prospect Small Business 401(k) Clients


401(k) clients can be a valuable asset for financial advisors.

By offering your 401(k) services to small businesses, you can add more value to your small business owner clients while creating additional relationships and planning opportunities with employee participants. This gives you another source of revenue and prospects while increasing your value to existing small business owner clients. 

But, most financial advisors say they don’t work with small business retirement plans, either because they aren’t familiar with the process or don’t think it’s worth their time. This can leave value on the table as small business retirement plans can be a lucrative tool to grow an advisor’s book of business.

So, for advisors interested in small business 401(k) clients, consider these strategies.

1. Tap into existing clients

Financial advisors should start with their existing clients.

Examine your current book of business. 

  • Do you have any small business owner clients? 
  • What about clients that are key-decision makers at a small business? 
  • Have you discussed how a 401(k) reduces taxes for owners and employees? 

Don’t assume that your clients understand the value of a retirement plan for their business. Many think it’s too complex or expensive for their business. This can be an excellent opportunity to educate owners on the benefits and process of establishing a retirement plan.

Make a list of your clients that could be interested, and add it to the next meeting’s agenda.

Remember, this can benefit both you and your existing clients. You’ll benefit by adding another revenue and prospect source to your business, and they’ll benefit by adding a retirement plan to their small business. This can help owners attract and retain top talent, reduce turnover, and increase employee satisfaction. And according to a recent Glassdoor Survey, “four in five employees indicate they want benefits and perks more than a pay raise, and a 401(k) ranks in the top five requested benefits.”

2. Prospect your everyday contacts

Next, consider your everyday contacts.

Each of us interacts with small business owners and key decision makers daily. Whether it’s your local bike shop, electrical contractor, or favorite restaurant, they may benefit from a 401(k) for their small business. 

And as an advisor, you’re uniquely positioned to help them add a valuable benefit to their business. Consider asking your contacts this simple question: Does your small business have a 401(k)?

If not, follow up by asking if they’ve ever considered it, and explain that the costs and complexity may be much lower than they realize. Remember that while many small businesses can benefit from a 401(k), many feel it’s out of reach from a cost or complexity standpoint. But, as a financial advisor, you understand the many benefits a 401(k) can provide, no matter the size of the business.

3. Leverage referrals from other professionals

Next, financial advisors can leverage referrals from other professionals.

As an advisor, you likely share similar clientele with CPAs, attorneys, realtors, payroll providers, and other professionals. For example, CPAs may recommend a business owner client set up a retirement plan to reduce their tax liability while saving for retirement. But, most CPAs won’t help implement or advise on the plan.

That’s where you come in.

You can become a referral partner by approaching other professionals in your network and explaining how you help small business owners establish and maintain a retirement plan. This can be a beneficial relationship, with CPAs referring business owners to you and you referring clients who need tax advice back to CPAs. 

Make a list of professionals in your area, and consider setting up a time to chat.

Remember, it’s essential to be respectful of other professionals’ time, and it may even be polite to offer to pay their hourly rate during your meeting. This small gesture can go a long way in demonstrating your professionalism and interest in a good working relationship. Done right, this can be one of the most valuable referral sources financial advisors have.

4. Network with local business owners

Lastly, financial advisors can network with local business owners.

Consider joining your local chamber of commerce, where you can tap into a network of local business owners. This is an opportunity for you to form relationships and contacts that can blossom into valuable business opportunities. But, instead of focusing on what others can do for you, consider how you can add value to them. This will help you become a valued member of your local group, and naturally, business will follow.

Remember, as a financial professional, you have many contacts, relationships, and strategies that can benefit business owners.

Doing something as simple as presenting a list of financial planning strategies to business owners could turn you into a trusted expert within your local group. And while you may think that every business owner knows the basics of financial planning, many don’t. 

By showing up and sharing financial strategies for business owners, you can become the first name owners think of when they’re ready to set up a 401(k) plan for their small business.

We’re better together

At 401GO, we know that our amazing platform and your excellent service make for an unbeatable offering.

Small business retirement plans tend to function better when an advisor is involved. Our efficient and affordable platform allows advisors to build their business by capturing the micro-market. So if you’re interested in partnering with us and gaining access to a robust, tech-enabled 401(k) solution for your clients, learn more about our partnership program or book an appointment to talk to a specialist.

Learn more about our 401(k) options optimized for small and medium sized businesses.

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Jennifer Stott
Jen is experienced at creating and managing marketing content and blogs. She enjoys communicating about this complex industry.

Learn more about our 401(k) options optimized for small and medium sized businesses.

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