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Home » Working With Us » Assessing the Small-Plan Market

Plan

Assessing the Small-Plan Market for Financial Advisors

A sizeable opportunity

  • About 99.6% of 22.1 million owner-owned U.S. companies have fewer than 100 employees.1
  • Five million owner-owned businesses have fewer than 20 employees.2
  • Roughly 95% of companies with 5 or fewer employees do not have a retirement plan.3
  • Owners of companies with 1-25 employees are often excellent candidates for a Tiered 401(k) or Defined Benefit Plan.

Targeting small businesses establishes creative plan design as an important differentiator for your business.

A bridge to business owners

Unlike with large plans, you generally work directly with the business owner to review a small company’s plan design options. This facilitates developing personal relationships with the owner, and may open opportunities for referrals to other small-business owners as well.

An under-served buyer

Advisors familiar with the basics of proper plan design have a tremendous opportunity. Most financial advisors who specialize in the retirement-plan market focus on plans above about $10-$15 million, neglecting small-business owners.

Leading with plan design

The sales process for a small 401(k) plan usually begins with the review of the owner’s plan design options. This step is a true value-added service that serves to differentiate the financial advisor from competitors who typically lead with investment products.

While the selection of the proper investments for the plan is important, initially focusing on proper plan design gives the financial advisor an opportunity to get to know the owner’s objectives and concerns prior to discussing investment products.

1 Sources: U.S. Census, Non-Employer Statistics for 2010; U.S. Census Employer Statistics: 2011 County Business Patterns
2 Source: U.S. Census 2011 County Business Patterns
3 Source: General Accounting Office Press Release, July 16, 2013

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Aligning with an experienced, knowledgeable TPA can propel your retirement-plan business in ways you may least expect: through forward-thinking plan design, insightful practice management programs and top-notch service. Grow Here »

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