Sponsored by the Principal Financial Group and conducted with PLANADVISER, the “2011 Best Practices in Retirement Income Planning Study” provides insight into how plan advisers are or will be tapping into the growing baby boomer market opportunity.
The survey reveals that six out of 10 plan advisers are already providing retirement income planning services to plan participants; the majority (78%) plan to spend more time and resources on income planning over the next three years. Nearly 70% say they are or will be investing for growth in their income planning service, with 30% focusing on better planning tools.
The survey also found that advisers may be missing out on a key opportunity to build their retirement income planning business: being notified when participants leave the plan. More than a third (34%) are not being informed when participants leave a company or retire.
“Advisers can gain efficiencies in this area by working with plan service providers,” said Tim Minard, senior vice president, retirement investor services, The Principal. “By asking to be notified when participants leave the plan, advisers can be handed ready-made leads. Because it may be impossible to serve them all, advisers can ask providers to refer only those with higher account balances and then let the provider service the others.”
When asked to evaluate retirement income products in the survey, advisers favored options that can be personalized to each retiree’s situation. While a variable annuity with a Guaranteed Minimum Withdrawal Benefit (GMWB) rider is a widely accepted retail option, a majority of advisers (73%) do not recommend in-plan GMWBs or in-plan guarantees as an investment option inside a retirement plan.
A complete summary of survey results is available here.
The study was conducted with PLANADVISER in June 2011 on behalf of the Principal Financial Group. A total of 249 financial professionals serving qualified retirement plans responded to the survey, which results in a 6.2 percent margin of error.