10/10/2022 - 70 minutes
Episode Summary
Welcome to episode #41 of the Fiduciary U™ Podcast. I am going to try something a little different with this episode. I recently co-hosted Retireholics and a few people were giving me a hard time about how long the episodes are, even though they love the content. I conducted a poll on LinkedIn and 52% of people said they prefer breaking each episode into 2 parts. Not a huge majority but since this episode is a little longer than usual, I’m going to try it out and see what type of feedback I get. I am releasing Parts 1 and 2 at the same time so make sure to check out both episodes. You won’t want to miss either one. I can’t promise I stick with this format, but we’ll see how it goes.
My guest on this episode is Chad Johansen who is a Partner & Director of Retirement Plan Sales at Plan Design Consultants, a very successful TPA that focuses on the micro and small retirement plan market. He’s also ¼ of the Retireholics and self-proclaimed 401(k) nerd. The moniker works because, along with being one of my best friends in the business, he’s also one of the smartest guys I know in the industry. He's combines a technical mind, a savvy sales approach and an unparalleled work ethic to successfully serve advisors and plan sponsors.
On the episode, we cover a lot of ground, discussing how advisors can win big by serving the small retirement plan market. We have a great conversation about which recordkeepers are doing a good job in that space. How small plan’s need a different level of service than large plans and how advisors can develop a skill set and service model that meets those needs in a profitable way. Chad also shares insights about how advisors can differentiate by focusing on tax efficient strategies and advantages for small businesses as well as the benefit of paying fees as a deductible business expense. We also cover topics like why fiduciary liability is oversold in small plans and why advisors should focus on helping plan sponsors avoid operational failures, winning analogies to explain complicated topics, and why advisors need to understand the value of their time and start looking at technology as an investment instead of as an expense to scale their business and drive operational efficiency.
I always love geeking out with Chad and we had a great time on this episode. I hope you enjoy it
What You'll Learn
- How to develop a winning and profitable service model for the small plan market
- Which providers are doing a good job in small market
- Using tax strategies and analysis to optimize plan success for small business owners
- How to use analogies and story selling to explain complicated topics and build trust
- How helping plan sponsors avoid costly operational failures can build goodwill and client loyalty
- Why small plans should consider paying plan expenses as a billable to the company and not through the plan
- Why advisors need to leverage technology more effectively to improve scale and operational efficiency.
Links to Resources
- Chad Johansen: LinkedIn | Website | Email | Retireholics
Ideas Worth Sharing
- “Biggest issue in the (small market) space is that you have with an HR generalist, a CFO generalist, a person that is wearing many hats and the time effort and intelligence in the 401k arena just isn’t there.” – Chad Johansen
- "Don’t just sell the plan and depend on the recordkeeper or TPA to take of everything.” – Chad Johansen
- “If we continue to service and not educate, we’ll be dealing with the same issues 5 or 10 years from now.” – Chad Johansen
- “Unfortunately, operational efficiency and operational mistakes is the #1 thing I spend education time on with plan sponsors and committees…an ounce of prevention is worth a pound of cure” – Chad Johansen
- “If we can bring down the asset charge from 1% to 50 basis points and have the client take on $2,000 in billable that win for the employees and then plan sponsor.” – Chad Johansen
- “Advisors need to speak with conviction for why they are telling the client to write a check.” – Chad Johansen
- “In the 401k space, too many people are doing it as a by-product of the relationship." - Chad Johansen