Retirement Plan Sponsors Want Financial Professionals to Adjust Focus

Sponsors want more consultation on plan outcomes says new research from The Principal

Tweet this: Survey says retirement plan sponsors want #advisors to focus on savings outcomes, from @ThePrincipal http://bit.ly/1nZ9QhM

Business Wire

DES MOINES, Iowa--(BUSINESS WIRE)--

The majority of retirement plan sponsors rely heavily on projected participant outcomes—whether participants can retire successfullyto gauge the success of their plans. But they’re not sure their financial professionals are on the same page. That’s according to new research from the Principal Financial Group®.

Nearly two-thirds (63 percent) of plan sponsors measure the success of their plans by participants’ abilities to stay on track for a successful retirement. But less than half of those surveyed say their financial professionals attach the same importance to that metric.

“This is a clear opportunity for financial professionals to demonstrate their value,” said Tim Minard, senior vice president, The Principal®. “By expanding their focus and diving deeper into plan evaluation, financial professionals can build stronger practices and create loyal followings of highly satisfied clients.”

Supporting Retirement Savings, a national survey of more than 280 sponsors of 401(k) plans, was conducted by Brightworks Partners on behalf of The Principal Knowledge Center. The survey revealed that sponsors want financial professionals to help with plan design:

  • Plan sponsors believe their financial professionals are more focused on having a high participation rate (64 percent) and an attractive fund line-up (63 percent) than plan outcomes.
  • Plan sponsors are overwhelmingly (76 percent) open to consulting with financial professionals on plan design to help improve participant outcomes.
  • Two-thirds of plan sponsors expect their financial professionals to be aggressive in promoting outcome-focused retirement income planning.

“Financial professionals who focus on fees, funds and fiduciary responsibility may not be focusing enough on participant outcomes,” said Minard. “The survey shows that plan sponsor clients—and prospects—want to work with financial professionals who are as concerned as they are about the end game: how well participants will be prepared to afford a comfortable retirement.”

Resources to take action
The Principal offers a variety of new resources at principal.com/RetireReady to help financial professionals take action on this opportunity. Examples include:

  • Value proposition guide—helps financial professionals identify what sets their firms apart from competitors, define their marketing strategy and create a clear plan to communicate their firm’s purpose.
  • Plan evaluation tools and resources—allows financial professionals to calculate plan-level income replacement ratios to help evaluate the effectiveness of their clients’ retirement plans.
  • Prospecting resources—helps financial professionals prepare for discussions including a step-by-step guide on how to gather and evaluate retirement plan data for their block of business and get insight on conversation starters.
  • Plan sponsor seminar resources—a seminar, invitation and flier will help financial professionals educate plan sponsors about outcome-based plans.
  • Principal® PlanWorks—a holistic approach to improved participant outcomes, including a plan design strategy rooted in behavioral finance. PlanWorks helps harness the power of participants’ inertia to work for them instead of against them.

For more research, analysis and insights, visit The Principal Knowledge Center and connect with us on Twitter.

Survey Methodology
Brightworks Partners conducted this online survey of 283 retirement plan sponsors between September 12 and 18, 2013 on behalf of the Principal Financial Group. Those surveyed:

  • Offer standard or safe harbor 401(k) plans
  • Have more than 50 eligible employees
  • Use a paid financial professional to help select and monitor investment and service providers, consult on plan design, conduct enrollment meetings or resolve problems with service providers.

About the Principal Financial Group
The Principal Financial Group® (The Principal®)1 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $495.5 billion in assets under management2 and serves some 19.2 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

Insurance products and plan administrative services are provided by Principal Life Insurance Company, Des Moines, IA 50392.

1 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
2 As of March 31, 2014.

Contact:
Principal Financial Group
Sonja Sorrel, 515-362-2431
sorrel.sonja@principal.com
or
Terri Hale, 515-283-8858
hale.terri@principal.com

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