Niche Markets for Retirement Plans

Explore New Markets with Retirement Plans for Nonprofits and Governmental Groups

It’s no secret that there’s a lot of competition for big plans with big companies. And no wonder. These plans generate sizable revenue and connection to thousands of participants. Growing your retirement plan business can be tough in this highly saturated high-end market. But right in your own backyard, there may be opportunities to serve new clients who really need help. And you may even know some of the leaders who could open doors for you.

Seeking out niche markets for retirement plans can be important for several reasons:

1. Meeting specific needs: Niche markets often have specific needs that may not be adequately addressed by traditional retirement plans. By offering retirement plans that meet the unique needs of these groups, you can provide more comprehensive and valuable services.

2. Creating differentiation: Selling retirement plans to niche markets can help you differentiate yourself from the competition. By focusing on specific segments of the market, you can develop a deeper understanding of the needs in that field and build a high level of trust in those areas.

3. Building relationships: Focusing on niche markets allows you to build deeper relationships with your clients. By understanding the specific challenges and opportunities facing these groups, you can provide more personalized service.

4. Tapping into growth opportunities: Niche markets may be underserved or overlooked by larger competitors, creating opportunities for you to fill the gap. By identifying emerging niche markets, you can start to develop new sources of growth and revenue.

What types of niche markets for retirement plans are there?

Retirement plans for government entities

Government groups of all sizes present a unique opportunity for retirement plan professionals. Government entities are organizations or agencies created by a government, typically at the federal, state, or local level, to carry out specific functions or responsibilities. These entities handle a range of activities, such as providing public services, enforcing laws, managing resources and implementing policy initiatives. On a local level, these can include:

• Firefighters.
• Law enforcement.
• City government.

Like other employers, municipalities need excellent benefits to attract and keep top talent. Plans for government entities include 457(b) and 401(a) plans with or without a 414(h) pick-up provision.

Retirement plans for nonprofits

Nonprofits are another market of employers seeking a strong retirement plan to attract and keep top talent. A nonprofit organization exists to serve a specific purpose or mission, rather than to generate profits for its owners or shareholders. Nonprofit organizations can take many forms, including charities, foundations, churches, schools and social welfare organizations.

They often cannot pay to compete with for-profit employers. Strong benefits can be a way for them to make up for lower pay to attract and keep employees. They are often very small and need administrative help with their retirement plan. 403(b) plans are for the nonprofit market.

Pooled retirement plans

Businesses face various issues when offering their employees a retirement plan. A traditional 401(k) may be too expensive, difficult to maintain and risky for many employers. That’s why a pooled retirement plan is attractive to many organizations. It allows relief to employers who currently offer, or want to offer, their employees a retirement plan benefit but are wary of the fees and fiduciary liability that comes with it.

There are two types of pooled retirement plans. A Multiple Employer Plan, also referred to as a MEP, is a retirement plan for businesses that typically have a common interest, but that are not commonly owned. A Pooled Employer Plan, also referred to as a PEP, allows unrelated plan sponsors to pool their retirement resources with those of other employers. Both types delegate most administrative responsibilities to a third party.

Pooled retirement plans can help you build your business and serve more clients. The advantages of these arrangements have proven to be pretty clear. Instead of managing 100, $1 million individual plans with different plan designs, fund line ups, and TPAs—you can service 100, $1 million plans inside a single contract.

Overall, focusing on niche markets for retirement plans can be a strategic way for you to better meet the needs of specific groups, build trust and credibility, differentiate yourself from competitors, and tap into growing markets.

To get started selling retirement plans for nonprofits and government entities, look to people you know. You may know some of the very leaders who can lead you to the opportunity. Look at any clubs that you could join or that you already belong to. This can also give you access to local leadership. Online directories can also provide you with leadership information. Check out My Prospecting Pyramid to learn more.

You can turn to Ameritas to help you make the sale. Ameritas offers retirement plans for niche markets of all types and sizes. You can trust us to help you provide them with the right plan to meet their needs.