How to Carve Out a Niche in the 401(k) Market


By Sharon Pivirotto

Steve’s note: You know I’m all about the niche. (There has to be a Meghan Trainor joke in here somewhere…) Sharon Pivirotto is in the business of helping advisor with one niche in particular – working with owners of small businesses who need help with their 401(k) plans. Given the amount of change going on in that field and how much trouble business owners can get into if they are not on top of all the requirements of a sponsor, this is a discipline with a lot of value to offer clients in the niche. So, I am excited that Sharon has offered to contribute a guest post. Ladies and Gentlemen, Sharon Pivirotto…

Have you ever thought that going after 401(k) plan clients might be a good growth strategy for your business?

According to the Retirement Advisor University, there are about 150,000 financial advisors that have at least one defined contribution retirement plan client¹.  If you’re one of those advisors and would like to expand your 401(k) business, or you’ve been thinking about moving into this segment of the financial industry, then follow the four steps listed below to get started.

First, understand the rules.

The regulations surrounding retirement plans are complex. As an advisor selling or servicing retirement plans, it’s critical that you understand the rules.

Most of the rules surrounding a 401(k) or similar type of private pension plan come from legislation that was passed in 1974 called the Employee Retirement Income Security Act or ERISA. ERISA sets minimum standards for pension plans in private industry and standards of conduct for those who manage an employee benefit plan and its assets (those individuals being referred to as fiduciaries).

There are an abundance of training and certification programs for advisors that wish to specialize in the 401(k) industry and you can download a free copy of Financial Service Standard’s “Retirement Professional’s Designation & Certification Guide” here.

By going through specialized 401(k) training, you’ll be better able to:

  • help plan sponsors understand and comply with the regulations;
  • demonstrate value beyond basic investment selection and monitoring services and compete effectively;
  • provide assistance to plan sponsors in basic plan design changes that could have a large impact on the success of their employees to reach a financially secure retirement; and
  • understand what actions would make you an ERISA fiduciary so you can decide whether to offer investment advice or stick with investment education.

Second, decide who you’ll serve.

Niche marketing applies to the 401(k) industry as much as it applies to the financial industry in general.  Simply stating that your ideal client is anyone that offers an employer-sponsored retirement plan is not a narrow or defined niche.

You can define your market by location, company type (e.g. manufacturing companies or chiropractic practices), or type of plan (e.g. Solo 401(k)s, or Multiple Employer Plans aka MEPs). The more specific you can be, the easier it will be for your ideal client to see you as the clear choice to help them with their plan.

Once you’ve defined your ideal client, it’s important to ensure your marketing material, website, and client experience reflect your story.

As your business grows, it’s important to reinforce with your clients how you help them with their specific situation so it’s easy for them to recall you as a referral source when the opportunity presents itself.

Third, create a service model that’s referable.

In the retirement industry, a referable service model is one that includes three major components.

  1. Education. Your service model must educate your client on what’s required.  When a company decides to offer a retirement plan to their employees, an automatic understanding of ERISA and all that’s required is not automatically conferred. In order for plan sponsors to both meet the regulations, and appreciate the services you offer in support of helping them meet their responsibilities, you must make education a key component to your service model.
  2. Regulations. Your service model must cover the key issues outlined in ERISA so that it protects your clients in the areas of investment due diligence, service provider selection and monitoring, plan administration compliance, and participant communication requirements.
  3. Documentation. Without documentation, demonstrating a prudent process would be difficult to prove. An advisor that can help plan sponsors document compliance with the key ERISA responsibilities not only provides tremendous value to the client worth talking about, but can help keep the competition out.

Finally, build relationships with centers of influence.

As an advisor to a 401(k) plan, you are just one of many service providers that works with the company on their plan. Knowing who the other service providers are and building relationships with other firms that offer services to employee benefit plans can benefit both you and your clients.

As an advisor, you’re not expected to be an expert in ERISA matters or 5500 compliance so it’s essential that you identify centers of influence that you can have “on your team” to provide value to your client relationships. When you start to get to know and build relationships with third party administrators (TPA’s), recordkeepers, CPA’s and ERISA attorneys, you start to build a network of experts in their respective fields that you can turn to and refer business to, when the situation arises.

Remember, center of influences are typically more concerned with how well their clients will be taken care of than reciprocating a referral so as you reach out to your network, ensure you provide value-added education and resources so you’re seen as a valuable resource to them and their clients.  Consider joint education workshops for your combined client base or other ways to work together and provide value as a team.

What are you waiting for?

Besides the first step of making sure you know what the rules are, deciding to carve out a niche in the 401(k) market is really not much different than how you’d approach any segment of the financial industry.  If you’re clear on your value and who you serve, if you build and implement a comprehensive service model, and you include centers of influence in your overall strategy, you’ll have no problem growing a successful and referable 401(k) practice.

Sharon Pivirotto, AIFA, PPC is Managing Director at, a division of fi360 and creator of the 401(k) Service Solution. She blogs at You can read more about her here:


1. Retirement Advisor University Source for # of Advisors that have at least 1 DC Plan (see page 37):

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