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Partners, Education Can Boost 401(k) Assets

SCOTTSDALE, Ariz. - Communication, education, strategic partnerships and outsourcing are the name of the game for the "401(k) sales champions" who took to the podium to share their expertise with attendees at the American Society of Pension Actuaries (ASPA) here.

With the winds of change swirling around the industry as Washington mulls new retirement savings vehicles, those in the business focused on current best practices for 401(k) sales.

Strategic partners and outsourcing have proven invaluable for their business' success, plan providers said. It's all about relationships, according to Steve Wilt, vice president and senior financial advisor at Merrill Lynch. At Merrill, the brokers leverage existing client relationships as points of entry to sell the companies where the clients work new 401(k) plans, or additional investment options for those plans.

Chip Morton, an investment adviser with Raymond James Financial Services of St. Petersburg, Fla., who also specializes in 401(k)s, frequently partners with brokers who have 401(k) sales leads. "I prefer to use the other million-dollar producers within my firm," he said.

Additionally, using the philosophy that time is money, Morton hires a certified public accountant to provide him with synopses of tax documents so that he can spend more time in front of his clients.


Education is a critical way to keep participants happy, the 401(k) salespeople said. "Keep it simple. There really are just a few basics," Wilt said. "Make sure you meet with the plan sponsor on a regular basis. Make sure you stay in front of the participants. Keep em both happy." Offering proof as to his success, Wilt said his business, which is half in 401(k)s and half in high-net-worth individuals, has remained steady during the bear market.

Adding that face time is very important to building a strong relationship, Morton noted that it is important to seem approachable and to "walk the walk" of the participants in the plan.

Illustrating how he attempts to relate to every type of person who might be enrolled in a 401(k), Morton explained that he often travels to meet with factory workers in the plan, wearing jeans and plain clothes. He said he wants to make those enrolled feel like he is one of them and not some corporate type.

"There are persons in a factory [who] may not be able to read and write," he said, noting that they would most likely be turned off by a man in a suit speaking about market-related issues.

"We don't try and sell them and get individual accounts," Wilt added. "We don't try and impress them on how much we know."

All for One

The six-person Merrill 401(k) team, which has about $600 million under management, took between five and six years to build, and has been successful because it is comprised of various experts on the team, according to Wilt. Wilt identified putting the proper pieces of the team in place as one of the keys to success for the sales and maintenance of the plans, comparing a 401(k) team's functionality to that of a doctor's practice or a law firm. While every member has general knowledge of the subject matter, individual team players are equipped with specific areas of expertise.

And while it is important to get knowledgeable people into the right positions, chemistry and personality are as important as credentials. "Our team is like a family," he said, adding that the candidates are picked because of a "combination of skills and talents. Then we look for the personality traits of being family-oriented, not being greedy. There's a lot of independence in this business, and we're looking for people who want to be part of a team."

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