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A Grass-Roots Marketing Strategy Pays Off

How one adviser used fliers and candy instead of cold calls to win a client base.

C. Marie Swift, 02/07/2008

While sophisticated, well-crafted marketing strategies can serve you well, sometimes it's the simple things that really get results. I recently spoke with Dennis Davis, president of Allegiance Financial Strategies Group, who has had tremendous success with a targeted, grass-roots marketing campaign.

This soft-spoken southern gentleman from Birmingham, Ala., came to be a financial advisor in his mid-40s, as a second career. He'd had no previous experience in financial services; He held no securities or insurance licenses. In fact, he had no furniture, no computers, no clients, and no prospects. For the first six months, he had people sign a letter that acknowledged that he could not give financial advice. As he was getting his training, he tried to find a way to connect with people in an informal, non-selling way.

Inspired by his friend and mentor Rick Kent, CFP, ChFC, AIF, president of Allegiance Advantage Group in Alpharetta, Ga, Davis decided to focus on working people who were five to seven years from retirement who would ultimately be rolling over their 401(k) assets. Kent had gathered more than $150 million in assets under management in less than six years. While other advisors were chasing the high net worth, Kent had attracted a loyal following of middle-income and mass affluent clients using a system that would later be dubbed the Merit Retirement Advantage.

Davis decided to adopt Kent's system. He held informational workshops and offered free financial reviews. For the workshops, he targeted baby boomers and local companies. He didn't use any fancy techniques for getting people to attend the workshops; he simply handed out fliers in front of office buildings. Sometimes he gave out candy as well, like the Halloween he invited people to take a flier and a handful of candy from the big plastic pumpkin he had filled with candy. People liked the idea of a free workshop with no sales pitch.

After the workshops, Davis was determined to keep the relationship going with participants. His goal was to be the advisor they turned to when a financial need arose. Like many advisors, Davis hates cold calling, so this system was perfect for him. Every call he made was to people who had attended one of the workshops.

In listening to Davis speak about his experience, it became clear to me that his approach was so successful because prospects didn't feel like they were being "sold." Workshops can be an extremely effective way to connect with people who might be somewhat skeptical about financial advisors--in a relaxed environment. While not a new idea, it's one that resonates with many people. It isn't sales; it's relationship building.

But Davis took his relationship-building strategy one step further by making the workshop attendees "clients" right away. While many of these people held little in the way of investable assets, what they did have was a good work ethic and the ability to save in their 401(k) or similar employer-sponsored plans.

The Program
Everyone who came to the workshop was entitled to sign up for a free financial literacy program called Merit Retirement Pro. The program provided free financial information (both mailed, e-mailed, and online), priority invitations to future workshops, and a membership card with Davis' contact information prominently displayed.

If workshop attendees said that wanted a little more hands-on advice, he showed them the Merit Premier program. For $299 a year they could access a special password-protected online resource center and meet with Davis for an initial financial review and receive professional advice on how to allocate their 401(k) money. If they renewed, members were entitled to an annual review in which Davis would provide professional observations and rebalancing advice.

Many of the workshop attendees needed help with related matters, such as buying insurance or funding their IRAs, 529 plans, or other vehicles. Davis was happy to help them all, regardless of membership level.

By working with people while they are still employed and helping them understand their 401(k) or 403(b)-type plans, Davis earned their trust and confidence. He got them to openly discuss their finances, which established a level of intimacy that you don't get making sales calls to someone who doesn't know you.

Davis knew he could build relationships, but did not have the time and inclination to do the 401(k) analysis of each client's plan on his own. Instead, he outsourced the planning function to Kent's firm, Merit Retirement Advantage, which had recently become one of the first RIAs in the nation to be certified by DALBAR's Fiduciary Adviser Network, a turnkey solution designed to prepare advisers to meet the standards of prudent selection required by PPA.

"FAN provides the training, due diligence and access to employers that advisers need in order to realize the income opportunities of being a Fiduciary Adviser," said DALBAR president Lou Harvey. "FAN supports individual practitioners; small and large practices as well as advisory services of major RIAs, banks, insurance companies and broker/dealers."

"As an advisor affiliated with the Merit Retirement Advantage, Davis is able to offer people a very targeted program to effectively help them maximize their 401(k) assets," Kent said. "The need for this has been a frequent media topic. During the past several years, there have been many reports regarding the funding needed for retirement, so people are slowly beginning to realize the importance of managing their retirement savings plans."

"Most people have no idea what's involved, or how a 401(k) can help them achieve their goals," Davis added. "The Merit network program offers real solutions to this specific need, making the program easy to understand. Most people also realize they have neither the time nor the knowledge to do this themselves; Merit and its affiliate advisors help to educate and simplify. This is incredibly beneficial for both the clients and the advisor."

Real Life Examples
I asked Davis to provide some real-life examples of how this marketing approach has been working for him. The first one he offered was of a man who had attended one of his free workshops and had stayed after the session to chat about his 401(k). Even though there was no apparent opportunity for working with the man in the near-term, Davis made a point of staying in touch with him through the Merit Pro program. One day the man called and said that his wife had 401(k) plans from several different jobs she'd held. He wanted to know if Davis could roll them all into an IRA. The assets totaled $250,000. Not a bad return on a handful of candy, a brief chat, and a phone call now and then.PAGEBREAK

Another example Davis gave was of a woman who needed assistance with her 401(k). In discussing the Merit program with her, he learned that her husband also had a 401(k). Davis offered to review both accounts. The husband took him up on the offer and during their conversation, the man casually mentioned that he had a brokerage account with another advisor and asked if Davis could review that for him as well. Davis now manages this $600,000 brokerage account for the husband on a fee basis.

For Davis, the workshops and the conversations with prospects about signing up for the Merit Premier program and 401(k) Maximizer service has become his pipeline. The client relationship starts to develop as soon as someone attends a seminar and indicates an interest in a one-on-one meeting with him. "It does take a lot of time to stay connected with people, meeting periodically and reviewing the performance of their 401(k) plan--even though there is no revenue stream yet. But as soon as there is a triggering event--either they retire, or they're downsized or they change companies--the relationship is positioned to generate income for me," he said.

And even though these future clients may be solicited by other advisors, many respond as one of Davis' pipeline prospects did. "I threw that stuff away without thinking twice about it," she told Davis, "because I'm working with you." As it turns out, this woman is being downsized and will be rolling over about $400k with Davis.

In another example, Davis had been working with a woman who'd been in the Merit program a couple of years ago. Her husband, who was not a member, called Davis because he was getting ready to retire and wanted to roll over $600,000. He figured that since his wife was already working with Davis, it made good sense for him to do the same.

Davis has continued to get new clients from the companies where he first made inroads, because word has spread and satisfied clients are referring their friends and coworkers.

In order to keep things moving, he still conducts workshops on topics such as "How Does Your 401(k) Work?" or on general retirement education topics. He's been very successful with one for which he invites someone from Social Security to come and speak. His local Social Security office has people who are dedicated to providing education. It is easy to schedule someone and he gets the presenter's script in advance so he can have it approved by his broker/dealer's compliance department.

Getting Started
Davis' approach to this grass-roots marketing effort was to identify a company that offered a 401(k)-type plan and to plan a lunchtime workshop at a reasonably priced restaurant near the company's offices. He would distribute fliers in front of the building or in the parking lot. Since he was doing this independently, without the sponsorship of the company, he was careful not to position himself on company property. Once he had established himself with significant number of employees at a given company, he could rely more on word of mouth and on existing clients happily handing out the fliers to their friends and coworkers.

The workshops are scheduled to last just one hour. Davis does a 20-minute presentation, focusing primarily on educating attendees about how to think about planning for retirement. He uses some of the tools provided by Merit Retirement Advantage and enlarges them to poster size for use in the front of the room as a visual aid. By allowing about 30 minutes for Q&A, he's able to connect with the attendees in a more personal way. By the end of the hour, there are always people who want some follow-up.

"The most important thing about the workshop," Davis said, "is that I never use it as a sales opportunity." As word gets around about the program and Davis' workshops, people are willing to attend because they aren't afraid that he'll try to sell them something on the spot. "My goal," he added, "has always been to develop a relationship with people and provide them with value."

Results Tell the Story
Davis has been using the Merit network program for about two years. He currently has about $30 million in assets under management--but the really exciting thing, he said, is the $50 million he has in the pipeline. "These people will be retiring in the next five to seven years and rolling over their 401(k) assets with me," he said. "By reaching out to people before they would typically think about engaging an advisor, I have essentially removed the competition from the mix, because I am the known entity--the obvious resource when it's time to roll over retirement assets. And all of this with a flier and a handful of candy!"

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