When it comes to building a retirement plan practice, networking is an important component. Whether you are a financial advisor or a third party administrator or an auditor, placing an advertisement in the local newspaper or the yellow pages (if they still have them) will be costly and less likely to bring in clients. Fact is cultivating a close network of referral sources and spheres of influence will be more productive in netting clients than any advertisement or Google search analytic.
While networking is important, the right kind of networking is more important. What is the right kind of networking? Pretty simple, it’s about reaching the audience of potential clients and referral sources. Believe me, 3 years in to building my practice, I know the good and bad of networking. The good networking is developing relationships with other professionals who can refer you business. Those can be accountants, attorneys (forget my old law firm, I had better luck networking with dead people), or other retirement plan professionals. Bad networking is networking with groups of people that can rarely bring you business. That can be networking with sole proprietors, networking with people who can not serve as a referral source for potential clients, or people who right off the bat, claim they can get you clients. I have been in business in one form of another for 14 years and I have never received a client from someone who claimed they can get me clients.
Networking is all about building relationships and building trust and it takes time. But there is a time, when you have to realize whether networking with particular groups or people are worth your while. I used to network with a small business group on Long Island for years. Nice people, attended a lot of events. Just never got a client, it wasn’t the right fit. People who are struggling in business have no money for 401(k) plans and if they do, a simplified employee pension plan is great because you don’t need an ERISA attorney or TPA for that. Funny thing is that I network a lot less than I did when I started my practice 3 years ago and I have more clients, only because I no longer concentrated time on the networking that wasn’t working.