How do financial professionals defeat a lumbering foe that lacks the depth to move with agility in the ever-changing environment that is the 401(k) universe? “Float like a butterfly, sting like a bee.” (Photo: Shutterstock)

Until such time as an unambiguously open 401(k) MEP becomes the corporate retirement plan standard, plan sponsors will continue to need to educate themselves on the art and maintenance of their firm’s 401(k) plan. There are plenty of tried and true methods they use to explore self-education (see “This is How 401k Plan Sponsors Get Education Answers to These Three F-Words,” FiduciaryNews.com, July 30, 2019).

If you disassemble the route plan sponsors take towards education, you’ll discover a significant similarity. As you might expect, many of them rely on their service providers to offer the needed teaching materials – both for their own edification as well as for the needs of their employees.

But that’s not the only place where they find what they’re looking for. And this alternative source has been the bane of many a financial professional. Its lessons come through unfiltered and unverified. You’ll find it regularly contains both alluring myths and outright lies. The lectures often echo out in memorable soundbites. Each message chisels another chip off the credibility of the financial professional.

Oh, and did I mention the source of this information charges nothing for the service?

How do you compete against free? How do you dissuade the audience that the 401(k) equivalent of “The Daily Show” is not the same as the real news? In a sense, just as legitimate news sources too long ignored “The Daily Show” and allowed it to garner a false legitimacy, so too have financial professionals ignored this competitor.

What I’m referring to is the cornucopia of content farms that produce unvetted advice. These sources grow like untended weeds across the media stream, from websites to podcasts to cable channels. Not all information distributed through these media is illegitimate, but much of it is meant solely to sell ads, not impart meaningful knowledge.

Unfortunately, just as “The Daily Show” is written to be much more digestible than the typical network news show, smart creators have exploited their mass media (and marketing) acumen to divert the attention of both 401(k) plan sponsors and participants.

Now, this isn’t a new problem. Professionals from all sorts of fields have faced this forever. Doctors have had to contend with snake oil salesmen. Preachers have had to confront false prophets. Scientists have had to vie with mystics.

So, too, then, have financial professionals had to deal with those who haven’t earned their way into the craft, but who have instead practiced the art of modern oratory. These are the sources of the sexy sizzle that turns people away from the nourishing steak. And all under the guise of “no charge.”

Again, how do you compete against free?

There is, however, a winning strategy. It comes not without some modest investment. It comes not without some need for assertiveness. But it does come with a proven formula for success.

There’s not enough space in this column to detail the complete answer, but perhaps a metaphor might help you imagine the path to victory.

Muhammad Ali famously said “Float like a butterfly, sting like a bee.” He used his deft footwork to dance, pivot, and jump around his lumbering but stronger rivals. They could not move fast enough to score against his quickly changing target. As Ali floated, his opponents tired themselves out. Meanwhile, Ali’s stinging jabs further weakened his challengers. Ali didn’t always win, but he won enough to be nicknamed “The Champ.”

How do financial professionals defeat a lumbering foe that lacks the depth to move with agility in the ever-changing environment that is the 401(k) universe? “Float like a butterfly, sting like a bee.”

Where do 401(k) plan sponsors go to learn? They can go anywhere, but the smart ones know the only true source is an experienced professional.

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