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Tips for Capturing Big Rollover Business

July 11, 2013

IRA and 401(k) plan rollovers are among financial advisors’ biggest sources of new assets. They typically reflect years of steady contributions by investors, and as more baby boomers retire in the years ahead, the opportunity to capture rollovers will increase substantially. Yet advisors frequently make mistakes when approaching this market.

The No. 1 mistake advisors make is failing to design a marketing plan aimed at people with rollovers. In fact, most advisors put the bulk of their marketing resources into sources of new assets with less potential.

According to Tiburon Strategic Advisors, retirement plan rollovers already account for 36% of new client assets for independent advisory firms; by comparison, 13% are assets moved from full-service brokers. To make the most of that dynamic, you may want to re-prioritize your marketing efforts to focus on where the growth is.

The next mistake advisors make is working as generalists rather than specialists when it comes to people with rollovers — who are, broadly speaking, people in transition. Those who are retiring after a long career may want advice on how to replace health or life insurance benefits. Some may be career changers who would appreciate introductions to people in your network about potential job openings. Others may need help with budgeting or cash-flow issues, particularly if they have been “downsized.” Advisors can differentiate themselves by discussing how they can help in ways the competition either won’t or can’t. And they should be able to communicate quickly about their specialization to rollover prospects.

Finally, advisors who lack a systematic way of prospecting for people with rollovers can wind up missing the boat. Some tips for getting more organized:

  • Let all your clients know that, because of the uncertain economy, you are now going to specialize in helping people in transition. Ask them whether they know any such people, and ask for a referral. If they know someone who is currently retiring or changing jobs, share how you can be a resource for that person. If they don’t, give them a few business cards they can keep on hand.
  • Try networking with a headhunter, and see how you can help each other. Recruiters meet people in transition every day.
  • Talk to people you know at local companies that are laying off employees. One advisor I coach had a contact at a company that was closing and wound up with more than 100 referrals.