How financial advisors can diversify their revenue through SMB retirement plans

Are you a financial advisor looking to diversify your revenue? Have you considered offering retirement plans to small and medium-sized businesses (SMBs)? This market represents a significant opportunity to grow revenue. These benefits are in high demand among small business employees. According to a Human Interest survey from 2022, a retirement plan is the most-wanted benefit after health insurance.

If current issues like market volatility, economic concerns, and rising inflation are prompting you to reevaluate, it could be time to expand your service offerings. By incorporating SMB retirement plans into your portfolio, you can address challenges head-on and foster long-term business growth.

Why should you diversify your revenue sources?

Offering a variety of services means that if one area experiences a downturn, others can help maintain overall business health. By not relying solely on one service or a niche audience, you can spread your focus and enhance your practice’s resilience during uncertain times. 

Expanding your offerings can also potentially increase cash flow to help safeguard your practice during market fluctuations. Clients may seek holistic advice and comprehensive financial services—and by broadening your portfolio, you can meet this demand by providing value through a range of advisory services in the retirement planning space.

How can financial advisors diversify revenue sources?

Understanding your client's needs is essential for offering relevant services. Building partnerships with other professionals can be a great way to provide comprehensive services outside your expertise. A stronger network goes a long way toward supporting your existing clients and attracting new ones. 

Consider bundling services to offer comprehensive retirement planning and create even more revenue streams. For instance, you can offer your clients a retirement plan along with services like:

• Financial planning 

• Investment advice

• Healthcare planning

• Property investment 

Bundling everything together lets you offer a complete package to your clients (aka increased satisfaction and loyalty) and helps diversify your revenue.

Understanding retirement plans for SMBs 

SMB retirement plans are designed to meet small and medium-sized businesses' unique needs and constraints. They often feature flexible contribution limits and simplified administrative requirements. Employees appreciate benefits such as tax-advantaged savings options. And, offering a retirement savings plan helps employers attract and retain top talent, among other advantages. 

Common retirement plans include 401(k), SEP IRA, and SIMPLE IRA plans, with a significant emphasis on 401(k) plans due to their popularity and benefits.

Benefits of offering retirement plans to SMBs

Want to add 401(k) planning services to your financial advisory offerings? There are many financial benefits and tax advantages from which your clients can benefit. Working with a 401(k) recordkeeper to provide plans to your clients can help you increase revenue. Additionally, as it can feel challenging for SMBs to pick a 401(k) provider, they’ll appreciate your guidance as their trusted advisor. 

Retirement plans can also help retain existing clients and attract new SMB ones, strengthening your client base and enhancing long-term business relationships.

4 strategies to introduce retirement plans to SMB clients

Here are four approaches to ensure your SMB clients understand the value retirement plans offer their business and employees:

1. Education. It is essential to inform SMB clients about the benefits of retirement plans (including tax advantages). Effective communication can lead to informed decision-making and increased adoption of retirement solutions.

2. Tailor retirement solutions. Customize retirement plans to meet the specific needs of each SMB. By assessing the financial health and goals of your SMB clients, you can work with a 401(k) provider to help ensure the plans you offer are aligned with your client’s objectives.

3. Build partnerships. Partnering with payroll providers, CPAs, and other professionals can help you reach more SMB clients. Collaborations with organizations, like Human Interest, can help streamline plan administration and management, providing additional value to your clients.

4. Leverage technology with a modern 401(k) provider. Utilizing technology to streamline plan administration and management is a game-changer. Fintech solutions enhance client service, making the process more efficient and user-friendly.

Help diversify your revenue, grow your financial advisory portfolio, and support your clients with valuable retirement savings services. Partner with Human Interest to offer full-service 401(k) plans at low-cost and affordable prices. Learn how Human Interest can help your financial advisory firm.