As the industry mulls over what to make of the DoL fiduciary ruling, one thing is certain: it’s going to get more complicated to acquire rollover clients. That’s because the new rules extend advisor responsibilities beyond just finding suitable investments for their clients. Under the new rules, if it doesn’t pay to rollover an existing plan 401(k), then the advisor just shouldn’t do it.
And they should. This year, $432 billion of assets are expected to exit sponsored plans and enter IRA brokerage accounts, according to Cerulli Associates. That’s around 5% of total IRA assets. Retirement rollovers are a major source of new asset flows into the industry and one that incumbents would be pained to lose.
The rules are still being debated but that hasn’t stopped the brokerage industry from scrambling for solutions. Indeed, 51% of advisors now think that their business will improve in the face of the DoL rule.
Whatever happens, retirement plan admins can get more aggressive about their marketing to large corporations. SimilarWeb, a web analytics company, recently released a report that details how retirement plan adminstrators can use competitive intelligence to identify the clients of their competitors.
One way firms can do this is by analyzing referral traffic to an administrator’s website. Plan sponsors make it easy for their employees to check on their 401(k)s by supplying them links to their administrator. By analyzing traffic to a provider, a competitor can get a feel for that firm’s client base. Firms will need to use a premium tool like SimilarWeb to get access to this type of web traffic data.
There are other marketing strategies retirement plan adminstrators can implement to poach new clients. One technique SimilarWeb recommends is looking at the architecture of a competitor’s website for clues about customers. The analytics company has a tool called Leading Folders which analyzes highly-trafficked sections of adminstrator websites. By doing so, you can uncover links that may hint at possible clients. Clicking on these links frequently yields confirmation that the company does indeed do business with a particular corporate client.
Lastly, SimilarWeb encourages retirement providers to analyze search data that’s driving web traffic to their competitors’ websites. Occasionally, administrators receive significant amounts of traffic from search engines using keyword terms that include their clients’ names. Dive deep into this data and an administrator can further breakdown their competitors’ lists of clients.
Beyond the impact of the DoL ruling, the retirement plan business is seeing a push towards more transparency, broader product selection, and fee compression. Employees of M.I.T., N.Y.U., and Yale recently filed suit against their universities for allowing excessive fees to be charged to plan participants. With new business up for grabs, retirement plan administrators can use competitive intelligence to yield fruit in the future.