The Evolving Role of the Broker
In our industry, change is nothing new. But figuring out how it affects you and impacts your role with your clients can be tricky. The good news is that RMS is here to help. We'll not only keep you abreast of industry changes, we'll also help you find a way to leverage those changes to position yourself for long–term success.
A More Sophisticated Product
As 401(k) plans continue to evolve, many products now include built–in features to help plan sponsors fulfill their fiduciary responsibilities and also offer participants investment advice. Providing those two services previously has been a major focus for many brokers. So what are your clients looking for now?
Recent surveys have shown there are a number of ways you can enhance your client relationships:
- Spend time with your clients and their participants to further identify and define their retirement savings needs
- Manage the RFP process for your clients
- Help guide plan sponsors through the plan implementation process
- Develop an investment policy statement for your clients' plans
- Conduct employee enrollment meetings
- Provide assistance to individual participants
- Communicate rollover and other options to terminating and retiring employees
The Maturing Market
Over the next few years, our industry will experience an unprecedented shift in retirement assets. By 2012 there will be $1 trillion coming out of retirement plans like 401(k)s, IRAs, mutual funds and other investment instruments every year.* That's bigger than the 401(k) market has ever been.
So how can you capitalize on this market transition to not only maintain your current roster of clients but to also identify new opportunities? Here are two ideas:
Get to know your customers.
You may already have a good idea of the wants and needs of your clients and their participants, but how well do they know you? Will you be the first person they contact when it's time to retire? It's estimated that by 2013, nearly 30 percent of an advisor's compensation will come from retirement income assets.* Who will they call to help them with a distribution plan for their savings?When it's time to retire, participants will want to work with someone they know and trust. If you're not viewed as that trusted advisor, they're likely to take their sizeable nest eggs (that you helped them to accumulate) somewhere else. The time to solidify that relationship is now.
By identifying and addressing the needs of participants as well as plan sponsors, you can help them maximize their investments while simultaneously stepping into the role of trusted advisor.
Frequent communication is key, and there are a number of opportunities for contact with plan sponsors as well as participants throughout the duration of their tenure with the company. Plan sponsors will benefit from your guidance when it comes to selecting service providers, and employees will benefit from enrollment meetings that detail their options. The opportunity to provide assistance and insight to individual participants is an excellent opportunity to build relationships so that when they retire or leave the company, they'll look to you for guidance on their distribution and rollover options.
Stay informed of legislative issues.
As baby boomers begin to retire in record numbers and the fluctuating stock market has turned retirement savings upside down, government policies are likely to change as well. It's important to stay up–to–date on legislative initiatives that will affect participants and communicate the impact to your clients. Not only will you become known as a trusted resource, you'll help participants make the most out of their retirement investments.Don't worry about staying on top of all of the regulatory and legislative issues on your own. We'll help keep you informed of issues as they arise and let you know what actions, if any, you and your clients need to take. Read the Legislative Updates article in this issue of The Arrow for more information.
Adapting to change and finding new opportunities to differentiate yourself in the marketplace may be challenging. But you don't have to go at it alone. RMS is here to help you navigate the constantly changing tides and bring value to your clients. Give us a call to learn more and receive one–on–one strategic guidance. Together, we can develop a plan to help you stay ahead of the competition and achieve lasting results.
