HELP! Question about selling 401(k) Plans

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Jan 27, 2008 9:13 am

I just got my 65.  I now have an opportunity to sell 401(k) plans but some are saying I should get my Series 7 and become a hostage of a B/D before I do this.

 
Can I make a good living offering 401(k) plans with just my 65 or would it be to my long term advantage to get my 7 and 63 to offer these plans while giving up my freedoms to a B/D?
 
Any help will be appreciated!
 
Thanks.
Jan 27, 2008 10:53 am

What do you mean by your tagline, "WE ARE IMPARTIAL"?

Jan 27, 2008 11:06 am

Do you have an answer to my question?

 
 
 
 
Jan 27, 2008 11:14 am

I dont understand how you can sell 401k plans with only a 65.

Jan 27, 2008 12:00 pm

why would you take just a 65....what am I missing....


series 6 - mutual funds
series 7 - plus individual equities
63 - blue sky etc.
63 + 65 = 66......new math
 
so....what can you do with just a 65
Jan 27, 2008 1:02 pm

He can charge a fee to participants for advice on how to construct their portfolio and other planning advice.

 
Unless he's charging a wrap fee in the 401k, he will not be able to earn commission income for implementing 401k plans for companies.
Jan 27, 2008 1:04 pm
Mr Advisor:

I just got my 65.  I now have an opportunity to sell 401(k) plans but some are saying I should get my Series 7 and become a hostage of a B/D before I do this.

 
Can I make a good living offering 401(k) plans with just my 65 or would it be to my long term advantage to get my 7 and 63 to offer these plans while giving up my freedoms to a B/D?
 
Any help will be appreciated!
 
Thanks.
 
You won't know what "freedoms" you're giving up until you've been in bondage.
 
Find out what your COMPLIANCE officer says and follow that advice.
Jan 27, 2008 6:23 pm

What do you mean by your tagline, "WE ARE IMPARTIAL"?


You should know that your 65 doesn't allow you to sell anything.

Jan 27, 2008 8:33 pm

Fairly new avatar, three posts, maybe its "the queen" reincarnated.

Jan 27, 2008 10:59 pm
Jan 28, 2008 9:23 am

I'll give you the benefit of the doubt that you're not you-know-who ... for now.

This is really a marketing issue.  With your 65 only and an RIA you will be limited to being compensated by charging your clients fees for advice for recommending 401k plans.  So long as your prospects want to pay this way, you're probably fine.

However, this eliminates you from consideration for those companies who prefer a product that is paid for via commissions.  This is usually the choice when an ER wants to pass on most of the plan fees to the EEs instead of paying them directly, which is very common with smaller ERs.  If all you can offer is fee-only, you will exclude yourself from contention in these cases.  One way or another, the costs of the plan must be paid, including your compensation, whether it's via fees or commissions. 

So the question is really a cost/benefit one: is the ability to be competitive on any type of business worth the costs/hassles of affiliating with a b/d'er?  And remember it doesn't have to be an all-or-nothing deal if you affiliate with the right type of independent b/d - you can go the fee route generally and only use the b/d'er when you need it to be competitive.

Now please don't respond by telling me about your boyfriend in Holland ...

Jan 28, 2008 6:04 pm

ice,

For the record, I did not recommend he take the 7 or go with a B/D, I simply said he should if he wants to compete for that segment of the market. 

Also, I wouldn't look for the 65 to go away anytime soon.  Most states still require the 65 for those working in an RIA, and many who go that route have zero need to get the 7 and do commission work.  So the 65 will surely remain for that reason.