Do you want to start a retirement and pensions plan firm? If YES, here’s a complete guide to starting a retirement and pensions plan firm with NO money and no experience. Retirement is one aspect of life that is certain no matter the kind of business, job or profession that you are involved in. In all countries of the world, different professions under government control set a retirement age for their civil servants.
So also in the private sector, there is a benchmark as it relates to the working lifespan of an employee; the age limit that an employee is expected to retire. If you are fortunate enough to earn a good paycheck as an employee or as an entrepreneur, it is very important that you draw up a monthly budget that would accommodate savings for your future life.
The truth is that beyond drawing up a budget and setting aside some portion of your salary for retirement, you still need to be disciplined enough not to draw from the account even when some financial needs arise. There is a very large market for retirement and pension plan firms due to the fact that employees and business owners both from the private and public sector will one day retire and they would need a retirement plan to fall to.
If you have been pondering on starting your own retirement and pension plan firm, but do not know how to go about it, then you should consider going through this article; it will sure give you the needed guide and direction.
20 Steps to Starting a Retirement and Pensions Plan Firm
1. Understand the Industry
The Retirement and Pension Plans industry is made up of private and public pension funds that provide retirement saving and income benefits exclusively for the sponsor’s employees or members. Plans are based on defined benefit and exclude defined contribution. Revenue in this industry refers to total contributions plus net investment income or losses, while establishments refer to the number of funds.
The performance experienced by the Retirement and Pension Plans industry is largely determined by the health of the financial and labor markets. In order to accurately rate the performance of pension plans, industry revenue is calculated by adding employer, and sometimes employee, retirement plan contributions to investment gains or losses.
A large chunk of the revenue generated in this industry under this definition is generated by investment returns, which are highly volatile. Contributions tend to be more stable, with fluctuations largely dependent on employer profitability and, to a lesser extent, employee disposable incomes.
The fees that an asset or custodial manager charges a retirement fund are not counted as revenue in this industry. The Retirement and Pension Plans industry is indeed a large industry and pretty much active in most developed countries of the world.
Statistics has it that in the United States of America alone, there are about 19,562 registered and licensed retirement and pension plans Firms scattered all across the United States responsible for employing about 54,611 people and the industry rakes in a whooping sum of $1 trillion annually.
The industry is projected to enjoy 2.6 percent annual growth within 2012 and 2017. No establishment can boast of having the lion share of the available market in this industry. One thing is certain about starting a retirement and pension plans firm, if you are able to conduct your market research and feasibility studies, you are more likely not going to struggle to secure clients because there are always clients all across the United States who would need your services from to time.
The fact that retirement and pension firms can be found in cities in the United States of America does not in any way make the industry to be over saturated; and the fact that there are people out there who would always need to plan for their retirements from time to time makes the business ever green.
Retirement age varies from country to country an also from profession to profession, but one thing that is common is that there is a limit to which anyone can be actively involved in the labor force hence the need to make adequate preparation for life after active service.
Irrespective of what someone earns and how comfortable they were when they were still active as an employee or as a business owner, if they are not deliberate about how they want to spend their life after retirement and then go ahead to make plans, they are likely going to retire broke and sometimes live a miserable retirement lifestyle.
Lastly, with retirement and pension plans firms, you can afford to partner with other smaller firms that are into financial related services. The bottom line is that if you have a robust network and you are well positioned, you can indeed maximize profits with your retirement and pension plan firm.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of retirement and pension plan firms cut across government corporations, corporate organizations, business owners cum entrepreneurs with employees who would definitely retire someday and would need a good retirement plan to take care of them when they are retired.
So, if you are looking towards defining the demographics for your retirement and pension plan firm business, then you should make it all encompassing. It should include government organization, corporate organizations, startups, entrepreneurs, and businesses within and outside the city you are operating in.
3. Decide What Niche to Concentrate On
Most retirement and pension firms tend to operate general services such as providing defined benefit plans to beneficiaries, collecting employer and employee contributions, and investing in assets to meet obligations, which are what a standard retirement and pension plan firm is expected to offer. This is why it seem that there are no niche areas in the industry.
But on the other hand, some retirement and pension plan firms may decide to major in some key areas or niche area such as;
- Private defined benefit plans
- State and local government defined benefit plans
- Federal defined benefit plans
The Level of Competition in the Industry
The level of competition in the retirement and pension plan firm industry depends largely on how big and organized your business is. Bigger firms work for government agencies and larger corporations and smaller firms usually work for small businesses and startup entrepreneurs.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or services properly, you will always make headway in the industry.
4. Know the Major Competitors in the Industry
Please note that in every industry, there are always brands that perform better or are better regarded by customers and general public than others. Some of these brands have been in the industry for a long time, while others are best known for how they treat their customers and how they choose to brand their business.
These are some of the leading retirement and pension plan firms in the United States of America and also in the globe;
- New York City Retirement
- Virginia Retirement System
- Florida SBA
- Alabama Retirement
- Maryland State Retirement
- CalPERS
- CalSTRS
Economic Analysis
When it comes to starting a retirement and pension plan firm, you just have to get your feasibility studies and market research right before venturing into the business. It is good to mention that this business is not for rookies; it is for professionals who have successfully gathered the expertise to handle such business.
But an aspiring entrepreneur can learn ropes on the business. You just have to be careful so that you won’t invest people’s pension contributions wrongly.
You will be expected to hire the services of experts that will help you with comprehensive economic and cost analysis of the business within the location that you intend launching it. If you get your economic and cost analysis right before launching the business, you may not have to stay the long before you break even.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a retirement and pension plan firm, you would have to start from the very scratch because you can hardly get the franchise of a retirement and pension plan firm to buy.
Starting a retirement and pension plan firm from the scratch might be stressful, but it is worth the stress. You should just try as much as possible to secure a good facility, hire competent pension managers and come up with good investment strategies and then leverage on every marketing tool within your disposal to market your firm.
Please note that most of the successful retirement and pension plan firm around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own retirement and pension plan firm today, one of the major challenges you are likely going to face is the presence of well – established pension plan firms and also other related financial lending businesses who are offering same services that you intend offering.
Some other threats that you are likely going to face as a retirement and pension plan firm operating in the United States are unfavorable government policies, the arrival of a competitor within your location of operation and global economic downturn which may affect your ability to attract small businesses who are already pulling out from pension schemes.
There is hardly anything you can do as regards these threats other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a retirement and pension plan firm in the United States of America, the legal entity you choose will go a long way to determine how big the business can grow.
You have the option of choosing either a general partnership, or limited liability company for your retirement and pension plan firm.
As a matter of fact, if your intention is to grow the business and have clients both corporate and individual from all across the United States of America and other countries of the world, then choosing general partnership is not an option for you. Limited Liability Company will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your retirement and pension plan firm; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
If you take your time to study the various legal entities to use for your retirement and pension plan firm, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or a ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your retirement and pension plan firm so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
8. Choose a Catchy Business Name from the ideas Below
When it comes to choosing a name for a business, it is expected that you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents.
So, if you are considering starting your own retirement and pension plan firm, here are some catchy names you can choose from;
- Life Ferry® Retirement & Pension Plan Firm, LLC
- Plan Ahead® Retirement & Pension Plan Firm, Inc.
- Lance Pit & Co® Retirement & Pension Plan Firm, LLP
- Ted Romans® Retirement & Pension Plan Firm, Inc.
- CED® Retirement & Pension Plan Firm, LLC
- Life Gate Group
- Greg Mills Pension Company, LLC
- Premier Pension Group.
- Green Retirements, Inc.
- Life Line Retirement & Pension Plan Firm, Inc.
- Prime Focus® Retirement & Pension Plan Firm, Inc.
- Live Cover® Retirement & Pension Plan Firm, Inc.
9. Discuss With an Agent to Know the Best Insurance Policies for You
In the United States of America and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.
So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your retirement and pension plan firm.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own retirement and pension plan firm in the United States of America;
- General insurance
- Risk Insurance
- Credit insurance
- Deposit insurance
- Financial reinsurance
- Lenders mortgage insurance
- Health insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own retirement and pension plan firm, usually you may not have any need to file for intellectual property protection/trademark.
This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
11. Get the Necessary Professional Certification
Apart from the results you produce as it relates to return on investment (ROI), professional certification is one of the main reasons why some retirement and pension plan firms stand out.
If you want to make an impact in the retirement and pension plan firm industry, you should work towards acquiring all the needed certifications in your area of specialization.
These are some of the certifications you can work towards achieving if you want to run your own retirement and pension plan firm;
- Certified Financial Expert (CFE)
- The Retirement Plan Fundamentals (RPF) Certificate
- CRPS® or Chartered Retirement Plans Specialist℠
- Certified Retirement Planner
- Degree in Finance Related Courses
Please note that you can successfully run a retirement and pension plan firm in the United States and in most countries of the world without necessarily acquiring professional certifications as long as you have adequate experience cum background in the retirement and pension plan firm industry.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized especially a retirement and pension plan firm.
It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own retirement and pension firm in the United States of America;
- Certificate of Incorporation
- Business License and Certification
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Consulting contract documents
- Online Terms of Use
- Online Privacy Policy Document
- Apostille (for those who intend operating beyond the United States of America)
- Company Bylaws
- Insurance Policy
- Memorandum of Understanding (MoU)
13. Raise the Needed Startup Capital
Starting a retirement and pension plan firm can be cost effective. Securing a standard office in a good business district, equipping the office and paying your employees are part of what will consume a large chunk of your startup capital.
It is a known fact that when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your retirement and pension plan firm;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
Retirement and pension plan firms require that you see physically with your clients hence it must be located in a good location; a location that is prone to both human and vehicular traffic and a location that is at the epicenter of a business district if indeed you want to attend to loads of clients and maximize profits from the business.
The fact that you can operate your retirement and pension plan firm from any part of the world does not mean that location has little influence on the success of your business. If you have taken your time to study the industry, you will realize that retirement and pension plan firms and related businesses are willing to pay expensive rents in order to stay in a good business district.
If you make the mistake of renting or leasing a facility for your firm in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for your firm, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your retirement and pension plan firm.
15. Hire Employees for your Technical and Manpower Needs
There are no special technologies or equipment needed to run this type of business except for customized pension management software apps and other financial related software apps and social media management software applications. You will also need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves).
When it comes to choosing between renting and leasing an office space, the size of the retirement and pension plan firm you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard retirement and pension plan firm, then you should consider the option of leasing a facility for your office.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision.
Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Fund Manager/Pension and Retirements Manager, Risk Manager, Accountant, Business Development Executive/Marketing Executive, and Customer Service Officer or Front Desk Officer.
Over and above, you would need a minimum of 6 to 15 key staff to effectively run a medium scale but standard retirement and pension plan firm in the United States of America.
The Service Delivery Process of the Business
The way a retirement and pension plan firm works varies from one agency to another, but ideally, a retirement and pension plan firm is expected to first and foremost build a robust company’s profile before sourcing for clients to hire their service.
A retirement and pension plan firm go all out to look for companies that are ready to provide retirement saving and income benefits their employees or members.
Once they are able to get members as the case may be, then they map out contribution requirements and what they expect to get in return when they retire especially as it relates to government legislature.
It is important to state that a retirement and pension plan firm may decide to improvise or adopt any business process and structure that will guarantee them, good return on investment (ROI) efficiency and flexibility; the above stated business cum services process is not cast on stone.
16. Write a Marketing Plan Packed With ideas & Strategies
As a retirement and pension plan firm, you would have to prove your worth over and over again before attracting larger corporations to enroll their workers in your pension scheme. So, if you have plans to start your own retirement and pension plan firm, it will pay you to build first build a successful career in alternative financial services.
Businesses and organizations will only enroll their employees under your retirement and pension plan firm if they know that they are going to get good returns on their investment.
So, when you are drafting your marketing plans and strategies for your retirement and pension plan firm, make sure that you create a compelling profile.
Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to the alternative financial services industry and the organizations you have worked for. This will help boost your chances in the market place when sourcing for clients/investors.
Here are some of the platforms you can utilize to market your retirement and pension plan firm;
- Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations, startups, small and medium scale business community in the location you intend operating your business
- Advertise your business in relevant financial magazines, radio and TV stations (make yourself available for retirement and pension plan and other related financial services related talk shows and interactive sessions on TV and Radio)
- List your business on local directories/yellow pages
- Attend international retirement and pension plan expos, seminars, and business fairs et al
- Create different packages for different category of clients in order to work with their retirement and pension plan
- Leverage on the internet to promote your business
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you get the right product pricing for a retirement and pension plan firm business is to ensure that you source your working capital from sources that won’t put pressure on you.
Another strategy that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products and services.
18. Develop Iron-clad Competitive Strategies to Help You Win
The retirement and pension plan firm line of business is a competitive industry, and you must come up with unique strategies to be able to outsmart your competitors in the industry.
Part of what you need to do in order to stay competitive in the industry is to continue to create better retirement packages and effectively manage resources under your control.
Another strategy that you can adopt is to ensure that your organization is well positioned; key members of your team are highly qualified and certified as it relates to their job roles.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.
If your customers are satisfied with your services delivery, they can hardly source for alternative service providers.
Statistics has it that one of the major reasons why clients source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service.
If you can continue to improve on return on investment (ROI) for people who contribute their pension under your organization and your customer service delivery, then you won’t struggle to maintain loyal customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be.
One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.
If your intention of starting a retirement and pension plan firm is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
In promoting your brand and corporate identity, you should leverage on both print and electronic media and also social media. As a matter of fact, it is cost effective to use social media platforms to promote your brands, and it is pretty much effective and wide reaching.
Below are the platforms you can leverage on to boost your brand and to promote and advertise your business;
- Place adverts on financial magazines and related newspapers, radio and TV stations
- Encourage the use of word of mouth publicity from your loyal customers
- Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote your business.
- Ensure that you position your banners and billboards in strategic positions all around your city
- Distribute your fliers and handbills in target areas in and around our neighborhood
- Contact corporate organizations, startups, small and medium scale business community in the United States et al by calling them up and informing them of your organization and the services you offer
- Advertise your business in your official website and employ strategies that will help you pull traffic to the site
- Brand all your official cars and ensure that all your staff members wear your branded shirt or cap at regular intervals.