The majority of retirement plan sponsors rely heavily on projected participant outcomes—whether participants can retire successfully — to 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.
- 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.
- 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.
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.