Top 5 Mistakes Advisors Make In Rollover IRA Market

Top 5 Mistakes Financial Advisors Make When Dealing With Rollovers---

Having seen the rollover market from both an advisor and
recordkeeper point of view, I can promise you that the biggest
obstacle advisors face when dealing with larger employers are the
recordkeepers themselves. Fidelity and Vanguard control over 75% of
the 401k Plans for Fortune 1000 employers and are doing their very
best to play keep away from every advisor in the industry.

After all, Fidelity and Vanguard have a lot to lose. They have
several hundred BILLION dollars at stake of leaving their firms and
want to retain the revenue stream from the assets. Therefore, they
are cross selling every product in their arsenal and as well as
giving advice to customers when they retire.

Fidelity and Vanguard have 2 of the most trusted brands in the
financial industry so advisors cannot make any mistakes to compete
against them successfully.

Here are the top 5 mistakes I have seen advisors make:

1. Underestimate the no-load recrodkeepers - They sometimes keep up
to 80% of the money when clients finally roll their retirement
dollars out. This means that EVERY other firm in the industry is
sharing what's left over. Most advisors do not realize this and
don't plan accordingly.

2. Many advisors don't understand how different rollovers are
processed - . For example, I have seen some advisors send in
internal documents to initiate a rollover. This never works and
results in the advisor looking unprofessional. The no-load firms
also use this opportunity to cross sell their services as well.
Advisors need to know exactly what to do and say when they call the
no-loaders because those firms are not going to help them. Having a
game plan is crucial.

3. Using a product vs. a consultative sale - Instead of going
through the "4 options" with a prospect and suggesting a product, I
recommend advisors use a 2 step approach when dealing with
potential rollovers.

Step #1 Learn everything you can about the customers existing 401k
AND the plan itself. By knowing what questions to ask and what to
look for you can uncover several drawbacks to the prospect keeping
the money in their 401k. Many clients are perfectly happy leaving
their money where it is. Therefore, you must give them good reasons
why they should change course.

Step #2 After you have learned everything you can, present your
recommendations. This 2 step consultative process will help you
come across like a true professional and will result in a greater
rollover "batting average."

4. Not properly understanding special tax treatments. - There are
several special tax treatments which you must absolutely know cold
if you are to succeed in the rollover market. I personally believe
advisors rely WAY too much on rule 72T without researching other
ways clients can access money without confining themselves to the
rules of 72T. For example, after-tax money can often be used
instead of 72T. This is another reason why properly researching the
prospects account and the plan itself are so important.
5. Not acting soon enough. - In war, which is what the rollover
space is, I would much rather face an enemy that did not know I was
coming than one who was on full alert. This means that you need to
start planting rollover seeds and helping clients well before they
retire. If you wait until your clients retire, the no-load firms
will be on full alert and be a much bigger obstacle. Use the current
market decline to prompt client a 401k "investment checkup."

Your hoping the US Dollar does not break its trend line Rollover
Coach,

Scott Brooks
www.rollovercoach.com