As a Retirement Plan Provider, Don't Turn Into A Bureaucracy.

They say that if Con is the opposite of Pro, then Congress is the opposite of progress. Nice joke, but Congress is known for its bureaucracy and the idea that nothing gets done, regardless of which political party is in control. Too often businesses start to become bureaucracies and the things that need to get done don't. I know; I've worked for a few of these businesses including third party administration (TPA) firms and law firms. So this article is about how as a retirement plan provider you could avoid the mistakes that turn your business into a bureaucracy.

A Great Idea isn't Everything. 

Execution is more important.

I always say that when I have a good idea, it's despite the fact that most of my other ideas suck.

Having been in this business for almost 17 years and in my practice for almost five, I hear lots of ideas from other retirement plan provider that is going to be great for them and the retirement plan business. While many of these ideas are good, many of them go wrong.

The reason that these great ideas go wrong is because usually they were planned wrong. A good idea isn't everything, but the execution of that idea is. I remember working with a plan provider who was going to make a huge splash in the multiple employer plan (MEP) business that was going to make them a ton of money. The problem is that they acted so slowly that eventually the Department of Labor killed off 95%of the open MEP market with an advisory opinion. So a year of planning, working, and getting billed by ERISA attorneys went to waste.

You may remember I was touting a company that was going to be the UPromise of 401(k) plans by giving money back in the form of a salary deferral to plan participants for online shipping. I thought it was a can't miss, but it did. They spent too much money in developing the idea that the slow rollout to plan participants couldn't support it.

So if you come up with a great idea to expand your business, just realize that the idea isn't everything, how you execute it is.

Or just a waste of time.

When it comes to building a retirement plan practice, networking is an important component. Whether you are a financial advisor or a third party administrator or an auditor, placing an advertisement in the local newspaper or the yellow pages (if they still have them) will be costly and less likely to bring in clients. Fact is cultivating a close network of referral sources and spheres of influence will be more productive in netting clients than any advertisement or Google search analytic.

While networking is important, the right kind of networking is more important. What is the right kind of networking? Pretty simple, it's about reaching the audience of potential clients and referral sources. Believe me, 3 years in to building my practice, I know the good and bad of networking. 

The good networking is developing relationships with other professionals who can refer you business. Those can be accountants, attorneys (forget my old law firm, I had better luck networking with dead people), or other retirement plan professionals. Bad networking is networking with groups of people that can rarely bring you business. That can be networking with sole proprietors, networking with people who can not serve as a referral source for potential clients, or people who right off the bat, claim they can get you clients. I have been in business in one form of another for 14 years and I have never received a client from someone who claimed they can get me clients.

Networking is all about building relationships and building trust and it takes time. But there is a time, when you have to realize whether networking with particular groups or people are worth your while. I used to network with a small business group on Long Island for years. Nice people, attended a lot of events. Just never got a client, it wasn't the right fit. People who are struggling in business have no money for 401(k) plans and if they do, a simplified employee pension plan is great because you don't need an ERISA attorney or TPA for that. Funny thing is that I network a lot less than I did when I started my practice 3 years ago and I have more clients, only because I no longer concentrated time on the networking that wasn't working.