Through a new business model for its reps, ING of London is now going after its 403(b) and 457 plan participants as potential financial planning clients. To financial planner Dan Candura, the 800-pound gorilla has been lifted from his back. As one of the financial advisers in ING's new Financial Horizons Advisory Program, Candura finally has more time to see clients and work on getting additional clients.
In its new business model for reps, ING is attempting to appeal to the middle market - more specifically, participants in the 457 plans and 403(b) plans it sponsors - as those who need financial planning services.
By starting with employees in Massachusetts, the financial services company plans to serve the potentially 200,000 participants in that state alone, especially the 20,000 in the 50 to 70 age range, by setting up a team approach for its advisers.
"As a sole practitioner, I did everything for my clients by myself," Candura said, including all front-end and back-end activities. "There was a weakness in there; you never get anybody else's input and it also becomes very time consuming."
Originally a part of American Express Financial Advisors of Minneapolis, Candura, based in Boston, heard about ING's recruiting efforts for its new initiative through his local Financial Planning Association chapter. Two weeks ago he signed up seven financial plans in one week. "The potential here is to add 150 to 200 in a year. It ought to be something that's achievable," Candura said.
To attract participants, ING has been sending in advisers, like Candura, to give asset allocation and "Retirement Readiness" seminars. The hope is to gain clients who have questions or want to create a financial plan after listening in. In just the few short weeks that the program has been officially launched, about 50% of the participants who attended the seminars are making appointments to see a planner, according to ING.
"This is our way of getting in front of people and setting up some basic principles," said John Wheat, chief marketing officer of ING Financial Horizons.
Because of ERISA issues, ING cannot give direct advice in 401(k) plans. However the 457 and 403(b) territory, "is a place where people haven't gotten a lot of attention," Wheat said.
Participants are typically assigned to the adviser who did the seminar for them. Wheat said ING charges a fee for service based on assets under management. The fee is less than 1% and will be wrapped where possible. He added that the program is also experimenting with cash-retainer deals, where clients can pay for the financial plan and then put on a retainer for a period of time.
Advisers meet initially with clients to discuss goals, but the actual plan is created internally by ING planners. Additionally, through the team approach, all marketing, client support, service and research is centralized by ING.
"The whole idea is to put the rep in the situation where they are really doing one of two things: teaching the seminar, which is a lead generation [tool], or sitting down talking to people and writing business," Wheat said.
After the plan is implemented, clients call a central number with questions. If the question requires setting up a meeting with the adviser, then a time is set. Otherwise calls are filtered to customer support. Although clients are guaranteed at the very least an annual meeting.
"That enables us to handle more clients," Candura said. "The service promise is better delivered in this model than a sole practitioner model."
ING has signed on seven advisers so far to work specifically with the new program. All advisers are registered reps and are either CFPs or certified retirement specialists. The advisers work off of a salary and do receive bonuses, though Candura said they are trying to figure out a structure that rewards team playing, not for recommending the most ING funds.
Though the program is only operating within Massachusetts at this time, ING plans to branch the program out to other state employees, which Wheat declined to name, in the near future.