RetireReady Solutions Blog

Welcome to the TRAK Retirement Planning Blog.

Knowing the Why?

Business man pointing to transparent board with text Why?

For better or for worse, knowing why something is a certain way can make a world of difference in how we approach it. For example, if you see a “Road Closed” sign and you believe it’s there because the local government likes to frustrate residents, you might decide to drive around the sign. However, if the real reason for the sign is that a bridge is out, you could face serious consequences for having the wrong answer to why the sign is there.

As advisors, understanding why can help us address our clients’ questions. If a woman walks into your office and asks whether you sell annuities, you may be tempted to seize the opportunity for a sale—but you do not know why she is asking.  If you knew her question stemmed from being told to never buy anything from someone selling annuities, you would respond to her question differently.

A 2019 Fidelity Investments study sheds light on the attitudes of plan sponsors. Knowing not only why a plan sponsor has a 401(k) plan but also why they are bringing an advisor to the table can help you retain your current plans and better prospect new plans.

Fidelity reports that the number-one “reason for hiring an advisor was to understand how a plan is working for their employees, and how to improve it.” This finding provides the context for why plan sponsors bring an advisor to the table for their retirement plan—and it provides insight into how advisors can retain their current plans and gain new ones.

Let’s back up for a moment. How does a plan “work” for participants? I believe many advisors answer this too academically or abstractly. When a plan “works,” it means more than keeping fees low, allocating funds correctly, or gaining assets. Those elements are important, but there is a more concrete answer: A plan “works” for participants when it provides the income they need in retirement. Remember that participants invest in a plan in order to have retirement income. The more you specifically address how their plan “works” for them, the more you are engaging the participants and simultaneously addressing the plan sponsor’s concerns.

Unfortunately, advisors often tend to be passive rather than proactive in their response to plan sponsors’ concerns. For example, in group meetings, advisors often refer participants to a web portal even though they know the participants are already logging into it. A slightly more proactive approach would be to offer a one-on-one meeting after the group meeting, but of course this might be a turn-off if the group meeting doesn’t address their key concern. If your approach resembles one of these options, you might want to consider modifying your approach to better meet the needs of the participants and the plan sponsor.

There is a tremendous opportunity for advisors who make an effort to be more proactive than other advisors in addressing plan sponsors’ greatest concerns. You will reduce the likelihood of losing your current plans and, as you prospect for new plans, you can differentiate yourself from the incumbent advisor.

RetireReady’s solutions provide the precise tools you need to engage participants with meaningful retirement needs analysis. Our intuitive reports provide clear, easy-to-understand retirement projections. And our plan benchmark report show the plan sponsor to what extent their employees are engaged in retirement and, over time, how that engagement is improving retirement outcomes for employees.


This entry was posted in 401(K) Participant Education, TRAK, 401(k) by Edward Dressel

With a long history of working with corporate accounts of all sizes RetireReady Solutions will draw on our experience to help your advisors increase their sales through client education.

Subscribe to Email Updates

Recent Posts