Fiduciary White Paper to Help Advisors  

In her white paper on "The Basics of Fiduciary Responsibility under ERISA," Beth LaCombe, an ERISA attorney with the Najjar Employment Law Group, Inc., in Andover, Massachusetts, discusses the definition of a fiduciary under ERISA, fiduciary responsibilities, breaches, liability limits, as well as plan participant investment advice and education. The white paper explains in easy-to-understand language who are fiduciaries with respect to a plan, and their roles.

"The primary responsibility of a fiduciary is to run the plan solely in the interest of participants and beneficiaries," she writes in the white paper. Other fiduciary responsibilities include: the duty of prudence, operating the plan in accordance with the plan document, the duty of diversification and only paying "reasonable plan" expenses. "The biggest fiduciary issue in plans relates to the fiduciary's failure to monitor service providers and investment options.  In addition, plan sponsors need to gain a better understanding of what services are being provided, as well as what the fees associated with those services are," she says. "Plan sponsors don't have a good understanding of the total amount of fees, like 12b-1 fees, that are being paid to service providers.  They also do not understand that they have a duty to continually monitor service providers, as well as the investment options underlying the plan."

Plan sponsors will be in shock when 408(b)2 rules go into effect on April 1st 2012 (for calendar year plans) and they see that they've been paying a large amount just for enrollment meetings. "These upcoming disclosure rules will provide an opportunity for advisors to distinguish themselves in the marketplace," she continues.

Beth suggests that advisors meet with their plan sponsors to bring them up to speed on the new rules. If advisors think that their fees will not be seen as "reasonable," then they need to take action. "They can provide additional value, which could include working with the plan sponsor to develop an investment policy statement for the plan, entering into a written service agreement with the plan sponsor, performing a year-end review of the plan's investment options, etc."

For more information on fiduciaries, ERISA Sections 408(b)(2), 404(c) and other laws impacting fiduciaries, Beth's white paper should be on your reading list.

Getting your foot in the door with a prospective client can be a trying endeavor, especially when faced with an irritated or difficult gatekeeper. Financial advisors deal with these individuals on a daily basis. Love them or not, they often play a crucial role in your business. Methods of pleasing or appeasing a gatekeeper can come in a variety of forms. Here are the top ways you can inch closer through the door.

Phone Introductions

"Hello, my name is John Smith from XYZ Financial. Is Ms. Jones available?" This seems like a perfectly proper introduction, which identifies who you are, where you're from and who you'd like to speak with. However, seasoned gatekeepers will already have their fingers on the "transfer-to-voicemail" button. The first issue with this introduction is formality. Not only does the gatekeeper not know who you are, but apparently neither does your target. By using first names, you put yourself at a familiar level with the gatekeeper. This will help you get you through the door.

"Hello Mary, this is John from XYZ Financial. Is Joan available?" This is better than the first example. However, this introduction still allows for uncertainty in the mind of an experienced gatekeeper. By simply stating that you are calling for a specific purpose, instead of asking, one may presume that the target is expecting your call. You're now just inches away from an entrance.

"Hello Mary, this is John from XYZ Financial. I am calling for Joan in regard to the company's retirement plan." This example might just be the key to the door. The introduction doesn't leave room for follow-up questions. Try not to pause midsentence, since stopping will make you appear unsure. By using first names and a confident tone, naming the person for whom you are calling and identifying the purpose your call , the gatekeeper might just let you put your foot in the door.

The Next Step    

You tried your best introduction, and you were still denied access. Whatever the reason, don't give up. When gatekeepers say that their colleagues are busy, ask when they will be free to talk. If a time isn't clear, ask to make an appointment, either in person or by phone. By making an appointment, you will already have your foot in the door. However, an annoyed gatekeeper may deny you an appointment. Never get pushy or rude. Remember, the people on the other end of the phone are working as they were trained. Ask for the target's voicemail. Then thank the gatekeeper for his or her time.

At this point, there are several options available that relate to one simple idea: gatekeepers are people, too. After a few days, call them back. Establish a good rapport. Be humorous and creative in your approach. Find something in common, but remember to thank them for their time. When you feel comfortable enough, ask if they can do you a favor by answering a few questions about your target: What is his or her preferred name, method of communication, etc. If you are polite and genuine, chances are that they will be, too. The goal is to gather information at every contact.

After the gatekeeper has answered your questions, send him or her a thank you letter and attach a letter for your target. Say how much you appreciate the valuable time he or she spent with you and ask for the target's letter to be passed along. Call again after a few days to check if the gatekeeper got your letter. You may be surprised by a phone call from your target.

If All Else Fails....

Sometimes, there's a nut you can't crack. After repeated attempts and phone calls, you've been denied access through the door, but you still shouldn't give up. However, you may want to talk with the relief staff. Call during lunchtime or at the end of the day. Someone who isn't as experienced as the regular gatekeeper may let you in. Remember, confidence is key.

A good rapport with these individuals can take you a long way. Even though they might not have any input in the decision-making process, they can make or break your chances of success. By following these few simple principles, you can move past the gatekeepers and get your foot in the door.

Charlie's Bookshelf

Below is a recommended book from The 401k Coach's bookshelf: 

  

E-Myth  By: Michael E. Gerber, 

The book will demonstrate and shall the reader how to install systems in the business so anyone can run it, then you will have a business, until then the owner/technician will only have a job. The systems, not the people will run the business and the business will do what it was designed to do. If anyone can run the business because of the systems then anyone can own it and it still will produce income for the owner and his employees. McDonalds is a great example of systems put in place will determine the desired outcome(not the people). 

The book will change the way you think of your small business and how to organize the business so you can attain a level of success and freedom. There are only two reasons to own a business to have freedom and to sell it one day.

To see more great recommendations, check out the 401k Coach Amazon Store.