Should Your Firm Be a Retirement Provider?

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

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Dear Bev,

Because we have a handful of high-net worth clients with businesses, we provide retirement-plan support when asked for it. The requests have not been complicated. We have located different plan options, recommended investments and worked on filings. One of my partners thinks retirement “is the future” and that we need to go into this area fully. He believes we should become more knowledgeable and put ourselves out as retirement consultants. I think this is a distraction from our successful business. I also know enough about retirement to worry about keeping up with regulations. Have you seen partners reconcile issues of this nature? We have an otherwise excellent business, and I want to be supportive, but I don’t want to regret doing something that isn’t right for our business or for me professionally.

Tom S.

Dear Tom,

Are you asking for support in reconciling the difference of opinion between you and your partner, or whether I support the move into retirement consulting? There is a great deal in your note, so let me address a number of aspects and let you choose the information that is useful to you.

  1. I recommend you explore what having a retirement arm of the business would mean. I’ve worked with a couple of the large providers to help create retirement programs for advisors and I can vouch that many have excellent processes and information to help an advisor get into the market easily and effectively. In addition, there are many ways to be in retirement. You don’t need to become a retirement consultant. You can offer a more formal set of the services that you are currently offering. So, please work with your custodian, Broker/Dealer or an asset management firm you trust, and see if you can get more information on what this would really mean for your business.
  1. Once armed with information, I suggest you and your partner have a mini-offsite. Plan to have coverage if needed, but agree you won’t check emails or messages for a few hours while you talk about this issue. Perhaps you could both confirm, or reconfirm, your vision for the business. Do you want the same things? Why is retirement important to your partner and not to you? Having a goal that’s aligned is important. Sometimes when partners have been together for a while they assume they have an aligned goal, but it’s necessary to confirm it.
  1. Once you have confirmed a mutually agreed upon goal, talk about the pros and cons of adding a retirement aspect to your business. Be as formal as you can about this. Allow each partner to talk about or write the positive and negatives as they see them. Review these together to find alignment. If you can afford an outside facilitator to help with this part of the process, it will enhance the outcome.
  1. If you agree that having a retirement arm could make sense, talk about what exactly this would look like. How will it alter your marketing approach? Your staffing? Where will you find the new clients? What exactly will the offering be? Sometimes, as you start to plan for a change like this and work out details, one or the other of you may realize there are things you have missed or you may get excited about the new possibilities.

This is not an easy issue. You need information in order to make decisions, and then you have to have an objective discussion about what’s best for both of you and the business.