Warmest Regards, 

Charlie Epstein, The 401k Coach® 

Advisor Success Formula. What do you need to do to be successful in 2012?

1. Write a Three Year Business Plan, with 90 Day Result Milestones. Ask yourself the Dan Sullivan Question: "If it were three years from today and we were looking back over the past three years, what would have to happen for you to be satisfied with your progress both personally and professionally?"
2. Develop Your Own Unique Process with a graphic overview that demonstrates your Success Formulas for Plan Sponsors and Plan Participants.
3. Transition to a Consultative Business Model. Start charging fees for your value added services.
4. Determine if you are or can be a Fiduciary Advisor at The Plan Level. If you have a B/D relationship what will your B/D allow?
5. Check your own E&O coverage, does it have ERISA liability protection or is it excluded? Does it have "tail coverage"?
6. Update or create a "service agreement." List your services, both fiduciary and non-fiduciary, whether you are a fiduciary at plan and/or participant level, whether you are a 3(21) or 3(38) and what your fees are for each service provided? Do you have any conflicts of interest in providing these services?
7. Leverage. Work with providers who can leverage your time and resources.
8. Scalability. Take the 30 Day Diagnostic Challenge. Discover what you should and shouldn't be doing to scale your business. Hire an in-house due diligence person or use platforms that offer 3(21) robust services to generate reports. To get a free copy of the Diagnostic Journal, email info@the401kcoach.com
9. Create a three year marketing plan to successfully achieve your targeted sales.
10. Become social media focused. Hire a boutique marketing company that is social media focused to help grow your Brand, connectivity and influence in your market.
11. Invest extensively in your database.
12. Become the local 401(k) expert. Write a blog or monthly article on 401(k) topics in a local business magazine.
13. Speaking Engagements. Reach out to the Chamber of Commerce and local business associations and offer to speak on timely topics.
14. Maximize technology by creating a virtual 24 hour company. Use worldwide services to solve business problems. Examples: CrowdSpring, 99 Designs, etc. They work while you sleep at global commoditized rates!
15. Commit to attending two industry focused conferences each year. Expand your knowledge and awareness.
16. Commit to achieving an industry designation...AIF, TRU, ASSPA, etc
17. Hire a coach!

Here is a persuasive conversation that I have with my plan sponsors, so they understand the value of capital creation in their "second economy."

While there are unlimited approaches to accumulate wealth, your company's ERISA qualified retirement plan still provides one of the best ways for you (as the owner) and your employees to create sustainable wealth, all on a tax favorable basis.

Let's examine some of the unique features of this timeless mechanism that shouldn't be overlooked.

Convenience

Establishing a qualified retirement plan, a profit sharing, 401(k) and, yes, even a pension plan (cash balance) has never been simpler and less costly. Today, most major retirement plan providers or independent third-party plan administrators can establish, design and administer your plan for minimum cost. If total assets in your plan are large enough (i.e., in excess if $5,000,000), the carrier will pick up or reimburse the cost.

Capital Creation

When I ask business owners what their retirement plans are, they unanimously say, "Charlie, you're sitting in it!" Yes, your business and your ability to turn a profit each year and eventually sell that business and sail off into the sunset will always by your greatest "wealth accumulation" vehicle.

But what if the "best laid plans don't come true"? What if continued globalization and commoditization reduce your margins until you have no business to sell? Or your kids eliminate that option for you by coming into the business? What if your "first economy" ship sinks? 

While your business will always be your "first economy," paying for your current lifestyle, your retirement plan can become your "second economy," creating wealth on a tax-favorable basis. With a properly designed plan, you can begin to "capitalize" your company by transferring taxable income or corporate earnings today into to tax deferred dollars for tomorrow's future paychecks. Think of your retirement plan as your "second economy" lifeboat! 

A standard 401(k) plan affords anyone the ability to invest a maximum of $17,000 per year ($22,500 if you are 50 or over). This is a sizable amount for the average income earner, and when invested over a long term, allows them to create enough wealth to replace their income in retirement. But for the owner of the company (or a professional service corporation), depending on your company demographics, a properly designed combo profit sharing/cash balance pension plan, will allow you to shift $100,000 to $300,000 a year from your corporate earnings to you "retirement plan economy."

When combined with your 401(k) plan, you can contribute up to $50,000 per year (or $55,500 if you are 50 or over). A pension plan, such as a cash balance, provides an additional $240,000 contribution per year to grow your second economy-all on a tax favorable basis! That's a pretty big boat!

Over a 20-year period, this would create a significant amount of wealth outside of your company and generate an income for life, in the event you are unable to sell your business.

Asset Protection

Real wealth accumulation should also be protected from unforeseen forces, and I don't just mean a prolonged bear market. Accumulating wealth inside your qualified plan affords you the asset protection of an "offshore island trust" without the expense or the travel. Qualified assets are creditor-proof, and in today's litigious society, this is a valuable attribute for securing and creating real long term capital and wealth.

OPM

As Danny Devito taught us in the funny movie "Other People's Money," the best way to accumulate wealth is with someone else's money. A qualified plan allows you, the business owner, to access tax dollars you would have otherwise given to Uncle Sam each year on your taxable wages or corporate dollars. Inside your qualified plan, you are afforded the luxury of investing and maximizing Uncle Sam's money for your future benefit! This is accomplished with either Uncle Sam's pre-tax basis dollars or with after-tax Roth contributions. Both offer the power of OPM. Best of all, your employees will enjoy the investing power of Uncle Sam's money and your OPM as well, should you provide a company match or profit share contribution.

Fiduciary Care

The investment options available in today's high tech retirement plans are almost limitless: mutual funds, ETF's stock brokerage windows, managed money, etc. More importantly for you (and especially for participating employees of your company-sponsored plan), an ERISA qualified plan carries the highest "standard of care" in the investment world. That is a "fiduciary standard of care!" Simply stated, you (as the plan fiduciary-sponsor) must operate the plan and manage its assets for the exclusive benefit of the plan's participants and their beneficiaries.

Achieving this standard is always a slippery slope. However, today's major retirement platforms offer both limited and full scope (section 3(21) and 3(38)) investment fiduciaries and managers who can take on these prudent roles and responsibilities for you. Most businesses today outsource, and you can do the same inside your retirement plan. These providers take on the fiduciary liability and rigorously monitor and manage the quality of investment options for you and your employees. Past performance is never guaranteed, but a superior investment line-up can be.

Your company's retirement plan, properly designed, managed and administered is an ideal mechanism for wealth creation. Don't underestimate this time-tested approach for capitalizing your business and creating greater financial peace of mind for you and your employees.

Try having this conversation with your plan sponsors and see if it inspires them to transfer money and create a second economy, so they have a paycheck for life. - Charlie