Becoming a Retirement Leader

Transcription

1 Becoming a Retirement Leader EXECUTION GUIDE Plan sponsors are looking for a knowledgeable advisor who can help them and their employees achieve their retirement goals. In this guide, we present an overview of how the top-performing advisors run their businesses and explain the three pillars of trust. By implementing these three pillars, you can grow your business and maintain an unerring focus on plan sponsors desired outcomes. For financial representative use only. Not for inspection by, distribution or quotation to, the general public. Investment Products Offered Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed

2 Training Curriculum Effective Plan Review AllianceBernstein Retirement FastTrack Building Your Capabilities Brochure Unique Value Proposition Becoming a Retirement Leader 4% Leaders 18% Evolvers 78% Dabblers There are 320,000 client-facing Financial Advisors actively serving the investing public. All but a few of them collect less than 40% of their income from defined contribution (DC) plans. That leaves only about 4% approximately 12,500 Financial Advisors who have an active DC business. That means they receive more than 40% of their income from DC plans. Regardless of where you are on the continuum, AllianceBernstein offers the tools needed to help you further build your retirement business and take it to the next level. For more information about any of our programs, please contact an AllianceBernstein Retirement Specialist at For financial representative use only. Not for inspection by, distribution or quotation to, the general public.

3 Beyond Ordinary Value What s really valuable to plan sponsors? An advisor who can help them and their employees achieve their retirement goals a knowledgeable person they trust, no matter what markets are doing. Extraordinary Advisors Put Investments in Context Many Financial Advisors or consultants (we ll refer to them collectively as advisors ) believe that their investment process is their value. But in reality, the investment process is only the beginning, and focusing too much on investments can cause plan sponsors to do the same. This can lead plan sponsors to obsess over short-term returns and sometimes to change advisors for what are believed will be greener pastures. Trust: The Cornerstone of Success Building trust with plan sponsors doesn t mean ignoring business-building opportunities. It s natural that advisors want to make the sale and bring on a new plan. However, the most successful advisors focus simply on doing the right thing for their plan sponsor clients: maintaining an unwavering commitment to achieving better retirement outcomes. To build a solid foundation for their businesses, these individuals transcend the typical hunting and gathering methods. They focus on building trust with everyone from plan sponsors to participants and referral advocates, and at every level of their businesses from plan servicing to new plan outreach. It takes time to build a foundation of trust, but the results have proven to be worth it. For financial representative use only. Not for inspection by, distribution or quotation to, the general public. 1

4 Building Trust in Your Business To understand how to build trust, we looked very closely at the best practices of the top-performing advisors: retirement leaders in the industry. Learning Best Practices from Top Performers We studied top-performing advisors to understand what they do to achieve success. By and large, they use a comprehensive retirement plan experience coordinating investment lineup evaluation and maintenance with a strong focus on plan sponsor education and communication. With well-honed, objective processes in place, these leading advisors can spend more time cultivating relationships with plan sponsors, prospects and referral advocates. This face-toface time leads to greater trust over time. The Proof Point: Cornering the Market Retirement leaders understand the connection between building trust and building a business, and they dedicate every activity of their businesses to maintaining best practices that lead to deeper, long-lasting trust from their plan sponsors. These retirement leaders have deep knowledge bases and can guide plan sponsors on all aspects of their defined contribution (DC) plans. This elite group of advisors controls 47% of all advisor-sold DC assets, and 69% of their books of business comes from DC plans. 1 More established advisors, with their firmly entrenched referral relationships and full pipelines of prospects, account for the majority of new-business acquisition. These leaders set a high performance standard. An Equation for Trust For plan sponsors, trust is the bridge between hearing your plan recommendations and heeding them. Trust is fundamental to most relationships, especially when plan sponsors are most likely taking on more risk. Plan sponsors will trust you if they believe that you re knowledgeable and dependable and that you care about their concerns that you re working to reach their participants goals, not your own. Plan sponsors are in charge of their participants retirement security, and they have to be sure that you understand and care. The same holds true for professional referral advocates like CPAs and attorneys. They re taking risks with their most important assets: their retirement plan clients, their own income stream and their reputation. Credibility + Reliability + Intimacy Self-Orientation Pillars of Trust-Building = Trustworthiness Trust rests on three pillars that are outcome oriented and are focused on the plan sponsor and participants. A refined process dedicated to achieving participant outcomes elevates your processes into a shared experience with each participant, promoting understanding, clarity, rapport and confidence. Your unique value proposition, delivered effectively, establishes a key strength in your business: a thorough solution to the complex needs of a targeted plan segment. Accountability through a culture of high standards and expectations establishes an unwavering adherence to integrity in everything you do. In the following pages, we ll take a closer look at each of these three pillars of trust. 1. Cerulli Associates, State of DCIO: Evolving Asset Manager Opportunities in the Mid-Sized and Small Plan Marketplaces, For financial representative use only. Not for inspection by, distribution or quotation to, the general public.

5 The First Pillar: A Refined Process If you lead plan sponsors through a carefully honed process that s dedicated to improving retirement outcomes and exude confidence, they ll put their trust in you. Build Your Reputation on Process, Not Products Successful advisors create value through the processes they use the mechanisms that develop deep plan sponsor understanding, structure appropriate investment lineups, and keep plan sponsors informed and confident. Your reputation for being competent, caring and trustworthy begins here. Plan sponsors can get investment products anywhere. What they need from you is your disciplined approach to overseeing their retirement plans and pursuing their plans goal: helping participants save for retirement. Disciplined and Repeatable Explain each step of your process to new plan sponsor clients to help them grasp how it works. Point out that it works that way for every plan even though every plan faces its own set of challenges. Use graphics to visually clarify each step. For example, walk them through the elements of your investment ˆ process, explaining how it seeks to keep their plan menu on track by monitoring fees, performance and appropriateness. When you get plan sponsors to embrace your process, you do far more than sell them products or services; you show them your credibility, reliability and empathy. You become their trusted ally. Trustworthy Specialists: What Plan Sponsors Want Plan sponsors often compare notes about advisors, and peer word-of-mouth has a lot of clout. They re looking for someone who has experience and expertise in handling specific aspects of their plans; generalists rarely get their business. When they hear about a retirement specialist who can provide objective investment analysis and plan reviews, they ll want to find out more. The objectivity provides prospects with a reference point of stability the potential of a strong framework for their financial well-being that won t disappear tomorrow. For financial representative use only. Not for inspection by, distribution or quotation to, the general public. 3

6 Focusing Your Process on the Right Thing Take the time to do the right thing for each plan. Eliminate capacity killers, and focus on building solid relationships grounded in trust. Delegating and Sharing the Load Many successful advisors learn to make time for what s really important: connecting with plan sponsors, prospects and referrals. These advisors streamline their efforts by delegating and automating the time-consuming and mundane elements of their business. With the time they save, they engage in more prospecting, building deeper relationships with new and existing plan sponsors and ensuring a strong referral pipeline. Where Do You Add the Most Value? A successful retirement business has four main parts: investment lineup design, fiduciary education to ensure compliance, participant communications and ongoing monitoring. These parts are equally important, but they shouldn t take up equal amounts of your time. Let AllianceBernstein Retirement Specialists help you with investment lineup design, automating investment screening activities and fund searches using tools like Fi360 or Zephyr. You can automate other activities even communications that are general and don t need your personal shepherding. With a better balance of resources with activities, you can carve out the time to transform your business focusing more on guiding plan sponsors and participants and on increasing your outreach efforts. To Increase Client Satisfaction, Strike the Right Balance Communication Ongoing Monitoring Fiduciary Education Investment Planning 4 For financial representative use only. Not for inspection by, distribution or quotation to, the general public.

7 AllianceBernstein Retirement FastTrack Can Help Build Deeper Relationships With the time you ve saved in making your business more efficient, you can develop stronger relationships with plan sponsors by using the AllianceBernstein Retirement FastTrack program. There are a lot of motivations today for plan sponsors to improve their organization s retirement plan; among them are continued concerns about fiduciary responsibilities and issues. There s also a steady stream of new US Department of Labor regulations that need to be evaluated and complied with. And, of course, there s a need to offer features and investments that improve retirement outcomes for employees. Leading plan sponsors are taking action or planning to enhance their retirement plans by asking key questions that cut to the heart of the matter. Retirement FastTrack can help you support plan sponsors in this effort and build a deeper relationship with them. The program allows you to benchmark a plan against other plans nationally in many aspects, helping you raise the bar and make their plans more effective at delivering better outcomes for their employees. Sharing the Experience Based on the information you gather, you ll be able to provide the plan sponsor with a customized benchmarking report in your next meeting called Raising the Bar. Benchmarking sponsors experience helps put their concerns and needs in context relative to plan sponsors all over the country, allows you to identify their top priorities, and enables you to define potential actions to enhance their plan s design. Lastly, by benchmarking sponsors experiences, you re helping them meet their obligations as a plan fiduciary. Specifically, benchmarking can help sponsors meet the prudent man rule, which generally requires fiduciaries to perform their duties with the care, skill and prudence of an expert in the field. Helping plan sponsors understand your process and how their plans choices influence participants retirement outcomes can reduce their anxiety, increase their confidence and build their trust in you. But you can t do this effectively unless you make the right amount of time for it. The process begins by sharing insights from AllianceBernstein s plan sponsor research and by having a comprehensive conversation about the organization s retirement plan. You ll collect specific responses from a plan sponsor using a fact-finding questionnaire or automated response system. For financial representative use only. Not for inspection by, distribution or quotation to, the general public. 5

8 The Second Pillar: Your Unique Value Proposition To stand out from the pack, you must create and deliver value to a target group of retirement plans. How effectively you communicate that message is the first step in defining your outreach success both with plan sponsors and professional referral advocates. What s a Unique Value Proposition? Your unique value proposition (UVP) is an encapsulating message that focuses on the differentiating characteristics of your business. This message should be brief and easy to deliver and must resonate with your audience. To do that, it has to both be important to the plan sponsors you ve targeted and speak to a unique strength of your business. An effective UVP immediately gets to the heart of an issue: a process, specific solution or particular benefit that your business provides to plans. Your UVP as Part of an Intentional Process Your UVP is the start of an intentional, educational process that will transform a prospect s thinking as you lead him or her through the plan integration process. You can develop trust and rapport during your conversations by focusing first on the prospect, then on the process. Only after leading the prospect through Retirement FastTrack and the custom benchmarking report, Raising the Bar, should you then deliver a full explanation of your business your capabilities brochure. This way, you ll build trust at every step, elevating both you and your business from typical to highly valuable. A Unique Value Proposition Delivered Effectively Prospect Education & Transformation Existing Relationship Trust Trust Trust Engage Deep Discovery Retirement FastTrack Present Capabilities First Plan Review 6 For financial representative use only. Not for inspection by, distribution or quotation to, the general public.

9 What Makes an Effective UVP? An effective UVP points to a specific benefit or service provided by your business. You can t simply claim, I care more about my plans than other advisors. Plan sponsors don t want a sales pitch or a friend. They want a knowledgeable advisor who has experience dealing with retirement plans and addressing their specific situation. Your UVP should capture their attention by targeting their concerns: the more specific your UVP is, the more likely it is to gain their interest. You may have several areas of specialization, but don t build a laundry list of UVPs. If you have more than three, they re probably not specific enough or you re trying to be too many things to too many people. Conducting Effective Outreach Your UVP may not click with every CPA and attorney, but even as few as five or six professional contacts can fill your business pipeline with referrals. CPAs and attorneys refer based on what they know about you and your professional business your expertise. In early meetings, listen to build trust. You won t have much time to speak, so make your UVP memorable of specific interest to that professional and his or her plan sponsors. When delivering your UVP, don t be overly eager or apologetic. You know you re an expert in your profession, so take ownership of your expertise. Your UVP defines what the CPA or attorney knows about you early on, but your full expertise will become evident over time. For financial representative use only. Not for inspection by, distribution or quotation to, the general public. 7

10 The Third Pillar: Accountability If you maintain a culture of accountability and high expectations in every aspect of your business, it will not only improve your business, it will become your persona. The Essence of Accountability The bottom line of accountability is growing your business. If your business is built on a foundation of excellence, you and your colleagues should strive to excel. Higher expectations can help create higher performance. And the momentum of this culture is self-propelling: it keeps everything working at peak levels. The first two pillars of building trust your refined process and your UVP are visible to the outside world. Accountability is more subtle: it s inside you. It comes out in everything you do and becomes the essence of your credibility, trustworthiness and value. Accountability to Whom? For What? To whom? There are four important constituencies that you re accountable for: Your plan sponsors Their trusted advisors such as CPAs Yourself Your business or firm For what? Being accountable also means that you have particular results that you must deliver. As a trusted and credible advisor, you re accountable for: Professional knowledge Acquisition activity Quality service Annual goals High expectations Next we ll take a closer look at these obligations. Accountability for Professional Knowledge Accountability for your professional knowledge is simply the cost of entry to becoming successful. You need to understand and clearly explain your plan engagement process, including how you position investment lineups, to plan sponsors without resorting to industry jargon. Rehearse your business-model presentation especially technical concepts before you unveil it to prospects: don t wing it! Develop articulate, clear explanations of any expertise connected to your UVP. You never want to be fishing for the right words with a prospect or referral advocate. If they don t understand you, they probably won t do business with you. 8 For financial representative use only. Not for inspection by, distribution or quotation to, the general public.

11 Accountability for Plan-Acquisition Activity It isn t easy to inspire high levels of plan sponsor satisfaction and generate a pipeline of referrals; it requires frequent, ongoing personal contact with professionals in the marketplace. Face-to-face meetings make a difference. Advisors who spend all day at their computers screening investments or searching 5500 reports aren t engaging with current plan sponsor clients, prospects or referral advocates. Carve out the time in your weekly schedule for 15 meetings. Advisors who want to grow their businesses need to network in person. Faxes, phone calls and letters don t always make an impression. Humans are creatures of the five senses and emotion. It s only in person that all those aspects come into play to solidify an impression. Accountability for Quality Service Solid business growth doesn t come from simply acquiring more and more plans. Quantity eventually undermines quality. Successful advisors often limit the number of plans they oversee. You might think that setting a number such as 150 plans is arbitrary, but there s often a threshold where the quality of relationships begins to deteriorate, weakening the connective ties between individuals. Many advisors have far more plans than they can effectively manage. This can lead to fewer meaningful engagements and usually a high rate of plan attrition. The solution to business growth isn t more plans; it s better relationships. This leads to deeper wallet share and more referrals, and it goes hand in hand with the business you want to develop: a concentrated focus on a niche group of retirement plans. The Priority Is on the Front Stage Activities Accountability for Quality Service 15 meetings a week with CPAs and attorneys* 50 referrals a year 50% become clients Sun Mon Tues Wed Thurs Fri Sat Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting Meeting *Please be advised that attorneys are bound by their state s own adoption of the Model Rules/Model Code of Professional Conduct, which may in certain situations limit their ability to enter into a referral arrangement with a nonlawyer professional such as a Financial Advisor. For more details, see inside back cover. Quality Source: AllianceBernstein / Number of Relationships For financial representative use only. Not for inspection by, distribution or quotation to, the general public. 9

12 Accountability to Annual Goals A healthy business never stops growing in quality, in trustworthiness or in effective service that leads to greater wallet share of a select group of retirement plans. The path to growth has to have annual goals. Goals create focus, direction and a sense of urgency. And they help fuel your upward momentum, giving you a healthy push to keep on track throughout the year. Goals also help you ignore distractions and focus on the big-picture tasks. Successful advisors always have one eye on the goal, and they cut to the chase with every effort by asking, Is this activity contributing to my goal? Set goals for everything, not just asset-growth numbers. For instance, set goals for having a certain number of outreach meetings with referral advocates and in-depth annual plan reviews with plan sponsors. Also, set goals on identifying and eliminating low-value activities. What gets measured gets managed. Accountability to a Culture of High Expectations Set your standards high. Set your expectations for quality even higher. If an advisor or firm tends to settle for good enough, they probably won t achieve extraordinary success. The culture of your business or firm will set the bar for exceptional plan acquisition and customer service. Never set it to a comfortable level: it won t inspire you and then you won t inspire plan sponsors. Setting the bar high and stretching yourself can promote healthy competition in a firm or team. Higher expectations for everyone create higher performance all around. 10 For financial representative use only. Not for inspection by, distribution or quotation to, the general public.

13 Building Trust to Build Your Business You can transform your business by implementing the three pillars of trust. They ll help you maintain the ultimate commitment: an unerring focus on plan sponsors desired outcomes. Plan Sponsors Will Know the Difference The elements of trust separate extraordinary advisors and retirement leaders from the rest of the herd. Credibility, reliability, caring consideration these can t be faked. Plan sponsors, prospects and referral advocates will quickly know if you and your business genuinely have an other-focused orientation. Trust isn t given easily: you have to earn it. How? By keeping an unerring focus on achieving your plan sponsors desired outcomes. You develop and strengthen that unerring focus by incorporating the three pillars of trust into your business. The Difference Is Trustworthiness Your plan engagement process, your unique value and targeted expertise, your accountability these elements may be slightly different from another successful advisor s business. But the common thread is the integrity and the trustworthiness you uphold in every aspect of your business. Keys to Differentiating and Building Trust Refined Process Process, Not Product Disciplined and Repeatable Unique Value Proposition Inspire Referrals from Professionals Present Business Model Accountability Professional Knowledge Annual Goals The First Pillar: A Refined Process Your well-honed plan engagement process delivers trust in the form of objectivity. From that objective process, the nuances of each plan sponsor s concerns and retirement plan goals will shape many outcomes, with each outcome crafted to an individual plan s situation. The objectivity of the process gives you greater credibility, and plan sponsors can trust that. The Second Pillar: Your Unique Value Proposition Refining your business to focus on a targeted plan group also inspires trust: you become the go-to person for a specific situation much like a highly specialized surgeon. And much like that surgeon s patients, your plan sponsors wouldn t be comfortable going to just anyone else. Your deep understanding builds trust. The Third Pillar: Accountability Demanding accountability of yourself is the essence of integrity. It s being steadfast in your commitments to plan sponsors, advocates, your business, your expertise, your service, your goals, your standards and yourself. When the reliability of those commitments is in your blood, everyone will recognize it and trust it. These are the pillars of trust. They give strength to your business, building a foundation that leads to success. Committed to Plan Sponsor s Outcomes Retirement FastTrack Transform Plan Sponsor Thinking Quality Relationships Culture of High Expectations Credibility + Reliability + Intimacy Self-Orientation = Trustworthiness For financial representative use only. Not for inspection by, distribution or quotation to, the general public. 11

14 Getting Started There are many changes you can make that will help you grow your business. It s simply a matter of making the time and getting started. Next Steps To start incorporating these concepts into your business, ask yourself the following questions: Do you have a defined process? Have you formulated your unique value proposition? Do you have a strategy for securing professional referral advocates? Are you demonstrating accountability regularly to plan sponsors? Have you created annual goals for yourself and your business? How AllianceBernstein Can Help Your AllianceBernstein Retirement Specialist can offer guidance and help you put your business growth plans into action. We ve developed a range of programs to help you elevate your business from ordinary to extraordinary. We ve observed top-performing advisors and retirement leaders, and we know the variables that lead to success. We can show you what an extraordinary business model looks like and how to select the best tools to make that business hum. For more information about this or any of our programs, please contact your AllianceBernstein Retirement Specialist at For financial representative use only. Not for inspection by, distribution or quotation to, the general public.

15 *Please be advised that attorneys are bound by their state s own adoption of the Model Rules/Model Code of Professional Conduct, which may in certain situations limit their ability to enter into a referral arrangement with a nonlawyer professional such as a Financial Advisor. In accordance with their professional responsibilities, attorneys making such referrals must not allow the arrangement to interfere with their professional judgement as to making referrals or as to providing substantive legal services. When referring clients to a Financial Advisor, any reciprocal referral agreement must not be exclusive and the attorney s clients must be informed of the referral arrangement. Attorneys must be aware of any conflicts of interest created by such arrangements. Reciprocal referral agreements should not be of indefinite duration and should be reviewed periodically to determine whether they comply with these rules. If you are unsure of an attorney s obligations in recommending you to their clients, you may check with your state s Bar Association. For financial representative use only. Not for inspection by, distribution or quotation to, the general public. 13

16 As an advisor, your ultimate goal is to build better outcomes for your clients. At AllianceBernstein, we share your commitment. We ve put our research to work for our clients around the world: Exploring the opportunities and risks of the world s capital markets and the innovations that can reshape them Helping investors overcome their emotions and keep their portfolios on track Defining the importance of investment planning and portfolio construction in determining investment success Providing tools to help advisors build deeper relationships that benefit their clients and their practices Our research insights are a foundation to help you serve your clients. Speak to your AllianceBernstein relationship team to find out how we can help you. This material was created for informational purposes only. It is important to note that not all Financial Advisors are consultants or investment managers; consulting and investment management are advisory activities, not brokerage activities, and are governed by different securities laws and also by different firm procedures and guidelines. For some clients, only brokerage functions can be performed for a client, unless the client utilizes one or more advisory products. Further, Financial Advisors must follow their firm s internal policies and procedures with respect to certain activities (e.g. advisory, financial planning) or when dealing with certain types of clients (e.g. trusts, foundations). In addition, it is important to remember that any outside business activity including referral networks be conducted in accordance with your firm s policies and procedures. Contact your branch manager and/or compliance department with any questions regarding your business practices, creating a value proposition or any other activities (including referral networks.) It is important to remember that (i) all planning services must be completed in accordance with your firm s internal policies and procedures (ii) you may only use approved tools, software and forms in the performance of planning services and (iii) only Financial Advisors who are properly licensed may engage in financial planning. For financial representative use only. Not for inspection by, distribution or quotation to, the general public. AllianceBernstein and the AB logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P AllianceBernstein L.P TAI Avenue of the Americas New York, NY