How financial advisors can attract clients by partnering with a 401(k) service provider

Offering a retirement plan is one of the best ways of attracting and retaining employees—in fact, it’s one of the most desired benefits among employees (second only to healthcare, according to a Human Interest study from 2022). Not only that, a growing number of states are requiring business owners to offer their employees some sort of retirement plan, so the number of potential clients is increasing as well. 

If your small business clients haven’t asked your advice about offering a retirement plan yet, there’s a good chance they will, either because their business is expanding, they’re hiring and looking to increase their edge—or simply because you are their trusted financial advisor. 

Should small business financial advisors consider offering their clients a 401(k) plan?

Meeting demand from clients asking for a 401(k) plan is one reason for offering a retirement plan option. If you’re their financial expert, you’re also likely to be their go-to for questions about retirement—and a trusted partner can help in that regard. But meeting expectations isn’t the only reason it can be worthwhile to offer a 401(k) through a preferred service provider. 

There are other ways offering a retirement plan can help expand your business. In addition to offering the financial product itself, you’re also demonstrating a broader range of expertise to your clients. That may help increase client loyalty, both in retaining clients and attracting new ones. Offering a 401(k) through a preferred service provider can also give you a competitive advantage. When your clients can rely on you for 401(k) provider options, you’re saving your clients from the time and effort of a lot of legwork in an area where they likely feel they have a limited background. 

Saving small business owners time, while also giving them confidence about their decision to offer their employees a 401(k)? That’s a win-win.

How can I attract more clients with a 401(k) service partner?

What new services would you be providing to your clients if you partnered with a 401(k) service provider? In addition to offering a retirement plan option through a partner, accountants can help small businesses evaluate the plan, including investments and fees, and compare different provider pricing models. 

Here are a few areas you can look for clients that might be interested in a retirement plan:

• Your existing client base: Current clients who might be open to a 401(k) include those looking to lower their tax liability and clients with new leadership.

• Professional referrals: Reach out to other professionals who work with small business clients, like insurance and payroll providers, and discuss the mutual benefits of referrals.

• Business owners and decision-makers: When you’re prospecting for new clients among business owners, whether it’s at a Chamber of Commerce or a local small business event, it may be beneficial to leverage the outside expertise of a qualified 401(k) service partner.

For more information, read our guide on assisting with selecting a 401(k) plan for your small business clients: How accountants can help select a 401(k) for their clients.

FAQs for accountants and advisors about offering 401(k) plans

1. How can I differentiate myself from other financial advisors?

By offering a 401(k) through a preferred service provider, you can set yourself apart from firms that offer a narrower range of services and expertise to their clients. 

2. How can I expand my services to meet the needs of a wider range of clients? 

When you work with a 401(k) provider like Human Interest that specializes in small business retirement plans, your clients may see you as the face of the plan—but in reality, the plan administrator is doing most of the heavy lifting. This allows your firm to expand its offerings without being overburdened.

3. How can I stay up to date with the latest regulations and compliance requirements to ensure the continued growth and success of my firm? 

Enlisting a 3(16), 3(21), or 3(38) fiduciary to help administer the 401(k) plan you offer your clients helps ensure the plan will stay compliant with the various federal requirements for retirement plans. A 3(16) fiduciary is a service provider hired by an employer to function as a “Plan Administrator” who fulfills a comprehensive set of duties that many plan sponsors find demanding, including keeping the plan in compliance with ERISA guidelines (compliance failures can be costly!). 

Both 3(21) and 3(38) fiduciaries deal with investments. A 3(21) investment manager can provide investment recommendations but must wait for approval from the client to make these decisions, while a 3(38) fiduciary can make investment decisions on behalf of the client. Human Interest Advisors LLC, a Registered Investment Adviser and subsidiary of Human Interest Inc., can serve as the 3(38) investment manager for your clients. In this role, Human Interest Advisors will have the discretionary authority to select, monitor, and revise the menu of investment options. 

Alternatively, Human Interest Advisors can serve as the 3(21) investment advisor for your clients. In this role, Human Interest Advisors will help your clients determine recommended additions to, and/or, replacements of the main menu of investment alternatives. However, your client would retain the ultimate authority to monitor and select investment options for the menu. Your clients can also opt to bring on their own financial advisor to assist with selecting the lineup. 

Learn how Human Interest can help your financial advisory firm

*Amy Johnson is an independent contractor commissioned by Human Interest to help contribute to this article.