Slideshow 5 Tips for Building Relationships with 401(k) Participants

Published
  • July 06 2012, 11:31am EDT
6 Images Total

5 Tips for Building Relationships with 401(k) Participants

Experts estimate that about half of all advisors work with 401(k) and other defined contribution plan sponsors in some capacity, including educating plan participants and providing them with investment support.

During retirement plan participant meetings, which are held at least once or twice a year, financial advisors have an excellent opportunity to boost their assets under management, according to Charlie Epstein, founder of The 401(k) Coach Program. “The conclusion of enrollment meetings is an ideal time to schedule one-on-one meetings with the plan sponsor’s employees,” he says.

Epstein acknowledges that initial meetings can be difficult as participants may not want to reveal too much about themselves. However, there are ways to put clients at ease. Here are five tips to help financial advisors make optimal use of their time during their first sit-downs with retirement plan participants.

Create a Dialogue

You should ask questions, but don’t be afraid to tell the client about your personal life, too. For example, you have a son or daughter who is just applying to college and the client’s child is now a freshman at the local university. You shouldn’t hesitate to ask them how he or she likes the school. By sharing a little bit about your personal life (when appropriate), you can relate to your client on a deeper level.

Content Continues Below


Don’t Sell Them

It’s important to put your client at ease. It may be stressful for them to talk about their financial situation with you. If they are like most other people, their retirement savings have been volatile the past few years. Let them know that you genuinely want to help them to achieve a brighter financial future.

Work from a Paper, But Don’t Be Afraid to Go Off Topic Sometimes

It is best to have an outline of questions that you need answered, but if you get off topic, that’s all right. It’s better for your relationship to get to know the person. However, don’t stray too far so that you end up talking sports or politics for an hour. The client’s time – like yours – is valuable. There’s a delicate balance between building trust and wasting time, but it is essential not to make the client feel rushed.

Discover What They Aren’t Telling You

A large portion of communication is non-verbal. Make sure you can tell the difference between an anxious client and one who is in a hurry. Similarly, you should try to control your body language as much as possible to keep the conversation going. If the person is talking about something important, nod your head as a way of prompting him or her to continue. Don’t cross your arms in front of your chest, even if the conversation is not going the way you want it. Keeping an open posture, facing them with your arms at your sides (or discreetly taking notes on important points), is an invitation for them to keep talking.

Content Continues Below


Be Prepared to Listen

You should be listening to everything the person has to say. Make eye contact, and if the discussion is pertinent, ask for more information. Be attentive and present in the conversation.