Advisers Plan to Increase Income Planning Services

A recent study shows a significant number of retirement plan advisers plan to ramp up their retirement income planning practices over the next few years. 

The 2011 Best Practices in Retirement Income Planning Study, sponsored by the Principal Financial Group and conducted with PLANADVISER, provides insight into how advisers are, or will be, tapping into the Baby Boomer retiree marketplace. Sixty percent of advisers either currently provide retirement income planning or have someone on their team provide income planning. Another 14% plan to offer the services in the future and 26% don’t currently and don’t plan to offer income planning.

Although a majority (63%) of adviser respondents are spending less than a quarter of their time on retirement income planning, 78% plan to allocate more time to this market over the next three years. One-quarter (24%) allocate between 25% and 50% of their time on retirement income planning.

A majority (67%) of advisers also say they are or will be investing for growth in their retirement income planning business. Nearly a third (30%) of this group will focus on planning tools.  

However, despite this interest from advisers, many may be missing out on key opportunities for building their retirement income planning business; one-third of advisers (34%) are not being informed when participants in the plan have benefit events.

Of those who are informed about a benefit event, 60% of survey respondents ask that all participants be referred to them, while 25% ask for only participants with high-value rollover potential. Advisers said the number one carve-out for segmenting prospective rollover clients was account balances of $100,000.

“Advisers could boost the efficiency of their retirement income business by segmenting prospects and asking for help from plan providers,” said Tim Minard, senior vice president of distribution, retirement and investor services, The Principal. “Ask to be notified when participants are leaving a plan. Because it may be impossible to serve all plan participants, ask providers to refer only those participants with higher account balances. The provider can service the others.”  

A complete summary of survey results is available here: