Skip navigation

401K, 529 Marketing

or Register to post new content in the forum

13 RepliesJump to last post



  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Aug 22, 2008 8:09 pm

Can someone share their experiences of approaching businesses to set up a company 401K plan for employees?

  Also, anyone had luck with seminars at schools geared to parents starting 529 plans for their kids?   Thanks.    
Aug 22, 2008 9:02 pm

529’s - iiiiick.  These are basically add-on’s for existing clients.  I would not prospect with those unless there is some uniques situation in your area that will line you up with wealthy people (like you are in a super-wealthy school district or something)

  401K's - start with real small plans.  I would look at both SIMPLE's and 401K's for businesses that don't already have one in place.  Cut your teeth on those, then once you learn the ropes, try to start pulling some away from larger companies.  The reason I say this is that many businesses that don't have them have been contemplating it for years, but never have the time or get off their duff to look into it.  Sometimes if you just walk in the door, they are willing to listen.  OTOH, if a company already has a plan, they are very likely to say "we're all set with that" because they are either fine with their's, or they don't have the time to worry about something that is already "adequate" (or the advisor on the plan also does their insurance, is a brother, is a friend-of-a-friend, etc.).  Also, most business owners won't complain about their retirement plan to a complete stranger, but are OK talking about getting one in place with a stranger.
Aug 22, 2008 9:46 pm


  IICK? OK, I have to say I don't follow. Aren't both done primarily by sytematically putting away money each month. What difference does it make if some designates $350 a month to a 401K or a 529? What am I missing (which is probably something substantial since I'm greener than fresh banannas)?   Thanks.  
Aug 23, 2008 12:12 am

dixie, let’s assume that you succeed in putting a 529 plan seminar together and you do a great job with it and get 20 people to attend.  Of those 20, you convert 5 of them to clients and they each put $350 month into the plan.  How much money will you make for the year? 

Aug 23, 2008 2:46 am

Anonymous is on to it, but I will finish it for him:

You land one 401K plan with 20 employees, you have 20 people (or whatever the number is) committing $xxx.xx per month in perpetuity. Someone leaves, they hire someone else - that person signs up. Then there is the employer match, which, depending on the situation may double the contribution (SIMPLE’s and Safe Harbors especially), as many of the participants in these plans put in the amount to get the match. In some cases, even non-participants are getting the employer contribution. If you don’t know what I mean, look at your SIMPLE and Safe Harbor rules.

With 529’s, they are usually 25-45 years old, putting in 50-250 per month, and it’s the FIRST thing they will cancel when times get tough. And you need to land probably 30-40 529’s to equal that one 401K or SIMPLE plan with 20 participants.

Yes, I know, you run into that RANDOM grandparent or wealthy parent that will committ big $$ to the 529, but this is very rare.

One other thing - you get a company retirement plan, you get access to the owner, the managers, the employees, rollovers, spouses, etc. Depending on your business model, you may be able to cross-sell other services (insurance, etc.) INCLUDING 529’s.

Unless you are going to be the “529 guy”, I would not make this your prospecting method of choice. Although, it will give you some good exposure if done in the right environment (at schools, PTO’s, YMCA’s, Nursery Schools, etc.). But you will NEVER build a substantial business doing this.

Aug 23, 2008 2:49 am

To add to my post - if you land the personal stuff for just ONE wealthy business owner because you have his 401K, you will make more than all your 529’s you will ever get, combined.

Aug 23, 2008 4:42 pm

I see…the match is key here with the 401K, not to mention everything that it can lead to. I agree, the 529 will get wacked alot sooner than the 401K in tough times.

Aug 23, 2008 8:18 pm


  I do get's just working smarter when going after the 401K first. Makes complete sense, even though that's not to say the 529 couldn't lead to something good...just not as likely as the other route.
Aug 23, 2008 8:21 pm


  I do get's just working smarter when going after the 401K first. Makes complete sense, even though that's not to say the 529 couldn't lead to something good...just not as likely as the other route.[/quote]   You might be too new at this to realize how long it actually takes to procure a 401(k) plan from cold to client.   What kind of firm are you at?  Do you have a certain amount of time to reach your production goals?    
Aug 23, 2008 9:24 pm


In the first few years, if you prospect 401K’s (or any company ret plan), it shoudl take up no more than 3-5 hrs. per week, max. As Sanags said, the lead time is long, and the payoff is very gradual.

The only way it works to prospect them hard from the beginning is if you have a VERY good plan for getting to the owner and/or people with money in the company (keep in mind, most of your plans will be small manufacturers, retails shops, restaurants, etc. that don’t have a lot of people with $$)

Aug 24, 2008 6:26 pm


  I'm a newbie....still looking at my options. I'd likely go the Jones route since I think their structured training for the Series 7 and their on-going training for people like myself that are coming from outside the business fits me best.   It seems to me there are two thoughts paramount to success in this business:   1.   Work your tail off from Day 1. 2.   Be smart and know how to work your tail off.   That's why I jump on these forums and try to ask as many questions as possible. I'm a people person that would probably love the relationship aspect of this position. And I have to say, all the people on these boards have been great. It's been an education.    
Aug 25, 2008 12:49 am

Dixiepucks, as a newby, you will want to avoid 401(k) plans.  Because of the leadtime, going after them will increase your chance of failure.  Don’t bother with them unless the decision maker is a personal client.  Once your success is assured, you can then go after them.  At that point, you probably won’t want new ones and only want established ones with assets.

Oct 27, 2008 1:45 am

Dixie as an example of close time from a cold call on a 401(k) the following example last week is a good indication.  Initial call made end of May 07.  First meeting June 07, next meeting october 07.  Client agrees to move plan next year in conjunction with several other plans.  Client very busy trade emails and several phone conversations leading to finally meeting last week where paperwork was eventually signed.  This plan will move before January and incidentally will have around $700,000 initially  with another $1-2 million going in the plan next year as this is several companies combining their benefits.  Unless you can wait that long I wouldn’t recommend it.  I know many times on this forum people just say “Do you know how long it takes to get a plan from a cold call” but don’t give a detailed timeline showing how long it can take.  This situation is probably slightly longer than usual for a plan of this size but by no means unusual.