PLANADVISER - March/April 2022 - 35

in each individual situation, she says. " Think about who
that ideal client is that you want to grow with and really
support, and how you can add the most relevant [services]
to them, " some examples being stock option planning for
high-net worth clients or Social Security and Medicare
education for Baby Boomers clients, she says. These can be
provided by the advisory firm itself, or through an adviser
partner who offers a specific service.
The Price is Right
Advisers put substantial resources into serving their clients,
which anticipates receiving a fair fee, sources say.
Some retirement plan advisers offer private financial
planning services to plan participants for a certain cost
per individual, says Shawn O'Brien, associate director for
Cerulli's retirement team in Boston. In these cases, the
financial planning fee is usually lower than what the adviser
would charge if the participants were not in a defined
contribution plan that he advises, O'Brien says.
" However, plan advisers will not typically manage the
DC assets for individuals in the plan, "
he continues. " If they want to engage
in an AUM [asset-under-management]based
relationship with a participant,
they will usually recommend that
the participant roll those assets into
an individual retirement account,
in which case the person becomes
a wealth management/financial
planning client, " O'Brien says.
Before working with a client, the
adviser should determine the scope
of the services the business expects
to receive. Will it want a full-service
offering or just services á la carte?
It might seem obvious, but pricing
yourself appropriately is key to
achieving profitability, Mace says. An
adviser can tout a holistic financial
wellness program boasting a full
menu of features and then underprice
himself-maybe to get the business.
But in doing so, she says, he can
unintentionally create a cycle that
perpetuates undervalued work.
It is best to lay out your intentions
at the start, Mace says. This includes
stating your prices, fees and services
accurately. " Too often I see advisers
overdeliver, but they don't have
enough confidence to price themselves
higher. You have to figure out how to
have that conversation and showcase
your value upfront. "
Benchmarking
your
practice
is
another simple step to ensure its
success. Managing client referrals, for
example, is crucial to growing an advisory practice. The
2020 PLANADVISER Practice Benchmarking Survey found
that receiving referrals from existing clients is increasingly
valued: Client retention is advisers' third highest concern,
having grown to 32% in 2020 from 18% in 2019.
Cutting Your Losses
There comes a point where advisers may have to break up
with a client, and that is OK, says Mace, as long as they
have a plan. This could include referring the client out to a
self-directed platform or to another adviser, whether that
person is a professional on your team or works at another
advisory firm.
If an adviser knows he cannot provide a service for
what a particular client would consider a fair price, then
he needs to have a game plan to communicate that to the
client, she says. " Being prepared to have that conversation,
having a plan for it and having people you can refer the
client to is a really powerful way to take action when it's
just not a good fit. " -Amanda Umpierrez
'Small Plans Can Pay'
HISTORICALLY, small plans have yielded unprofitable results to advisers,
but that has been changing in recent years. According to the 2021
PLANADVISER Small-Plan Services Survey, total plan assets for 401(k),
457a and 403(b) small plans have steadily increased since 2013, and the
plans achieved some of their highest asset figures last year.
Chad Parks, founder and CEO of Ubiquity Retirement and Savings
in San Francisco, who services small-plan clients exclusively, disputes
the stigma against these plans. " I'd encourage advisers to see how they
can be successful in the small-plan market, " he says. " There's a huge
market opportunity, so figure out a way to get into that market and
serve it well. "
Setting realistic expectations and then managing those sensibly is
key to profitability in the small-plan market. One way to control costs
is leveraging technology. Rather than scheduling on-site meetings
multiple times a year-which can be costly for both the adviser and
client-providing one or two virtual meetings is ample, Parks says.
Not only do more businesses accept virtual enrollment meetings
or educational webinars because of the COVID-19 pandemic, but small
businesses will
likely understand the cost barrier to a high-touch
approach and accept the more economical methods. Virtual meetings
allows advisers to still explain all the basics and intricacies of the plan
and take employee questions in real time, but without the expense of
visiting on-site, Parks says.
To make small plans more lucrative from the start, advisers can
charge a high flat fee early on to generate adequate revenue, Parks says.
" That's perfectly acceptable, and, believe it or not, small businesses
are willing to pay that. " And the better the job the adviser does, it will
benefit him in the long run. -AU
planadviser.com March-April 2022 | 35
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