Small Business = Big Growth

Small Business = Big Growth

Are you missing the opportunity?

Changes in legislation have spotlighted what it means to be a plan fiduciary. With a litany of 401(k) lawsuits in the media, plan sponsors are growing weary of taking on the fiduciary role and are turning to financial advisors to minimize their liability.

Do you have the capacity to be profitable in the small market space? Many advisors are choosing to work alongside a 3(38) to provide fiduciary protection to the plan sponsor and to work more efficiently in the small plan market.

There are a lot of moving parts to a 401(k) plan, and we know small business 401(k) plans can be very demanding. Whether all those parts are combined in a bundled package or are assembled from different vendors, the plan sponsor needs help coordinating it all into a smooth operating plan. That smooth operating plan involves managing a number of services including administrative, recordkeeping, payroll, participant, regulatory, and compliance. Handling these many moving pieces requires knowledge and experience that a plan sponsor likely does not have and a financial advisor likely does not have the time for.

Savvy financial advisors are choosing to work with a fully bundled 3(38) provider, allowing more time to strengthen their business and strongly position themselves for long-term relationships with their clients. For advisors who want to avoid becoming a fiduciary, working with a 3(38) investment manager and investment fiduciary is a viable market approach for growing their business.

Advisors can also add tremendous value to the plan outside of offering a 401(k) service that includes an investment fiduciary. The average 401(k) plan leaves participants to fend for themselves with little direction and guidance, and practically no idea whether they are on target to meet their retirement goals. Small businesses are looking to financial advisors to help solve this problem, and in return, financial advisors are looking to investment fiduciary services to provide participant support and outcome-based solutions—including education, monitoring, and retirement tracking—in a way that makes sense to the plan participants.

CoPilot is a fully bundled retirement service that does just that. Integrated with many payroll providers, CoPilot utilizes a 3(38) investment manager to create plan lineups and model allocations and an investment fiduciary to select and monitor the 3(38). Outsourcing policy decisions, investment decisions, and investment monitoring provides greater fiduciary protection to plan sponsors. The investment manager and investment fiduciary focus on the funds so you can focus on your clients, including your next client. That allows more time to connect, educate, and grow your business.

With more small businesses looking at retirement plans and new retirement plan features (auto-enrollment, auto-escalation, outcome-based plan alerts), the total assets in these plans are steadily increasing, making small business 401(k) a serious driver of BIG growth for advisors.

Looking to start capitalizing on the opportunity that exists in the small business marketplace? Partner with PAi to create the greatest efficiencies when selling and servicing a small business 401(k) plan.

Contact us to learn more, or give us a call today: 800.236.7400.

Michael Kiley, Founder and CEO