If you're looking for a way to significantly grow your practice, here's a key: increase your focus on retirement plans. And if you want to take it a notch higher, zone in on improving participant savings outcomes. Growing numbers of financial professionals have done just that by becoming very knowledgeable about the topic in recent years, some of them going so far as to work exclusively with retirement plans.
A new survey of plan sponsors reveals that focusing a practice on retirement pays off. But that doesn't mean every financial professional needs to go all-in. There will always be demand for the spectrum of financial professionals. But increasing your focus on retirement, and especially retirement outcomes, could make a significant difference.
The study, conducted by the Retirement Advisor Council, with funding and research oversight by the Principal Financial Group and six other council members, found better results among plan sponsors who work with a financial professional than those who have no advisor. But the survey also found that plan sponsors who work with retirement plan-focused financial professionals give them higher ratings and report more successful retirement plans.
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The survey of 400 defined contribution plan sponsors found that among those working with a retirement-focused financial professional:
- 95 percent report their relationship with the financial professional is "very beneficial" or a "necessity"
- 70 percent say at least half of their participants are on track for retirement (that's compared to just 47 percent of plan sponsors who don't work with an advisor)
- 83 percent have experienced participant deferral increases with two-thirds enjoying increases of five percent or more in the last two years (versus 18 percent of plan sponsors who don't work with a financial professional)
Plan sponsors are more likely to receive reports from retirement-focused financial professionals that outline the retirement readiness of participants in the plan. The majority of those sponsors have taken some actions suggested in the report to boost participant outcomes thus producing concrete, positive results.
Clearly plan sponsors recognize and value financial professionals who advocate for retirement plans that work.
The greater the financial professional's focus on retirement plans, the better the plan outcomes and the higher the ratings from clients. Those factors can lead to client retention and be a differentiator in attracting new clients. Good reasons to give your retirement plan knowledge a boost.
This doesn't mean you have to become a deep retirement specialist. After all, we know some plan sponsors prefer to work with financial professionals who have more generalized practices. But you can increase your focus on retirement plan outcomes with some outside help. Team with a more experienced colleague who can show you the ropes. You can also work with a retirement plan service provider that provides the resources you needto increase your retirement focus-especially around improving retirement plan designs.
Committed providers offer retirement plan education sessions and knowledge-building tools. They may also offer flexible service and back office support so you can choose how much or how little of the services you want to lead. Either way, your retirement focus increases.
Use the survey results to reassess the core services you offer. Are you doing the things that the survey shows stand out to plan sponsors? By growing your retirement plan knowledge, you can develop a thriving practice that fulfills you financially and professionally. With the potential for demonstrating higher value to your clients, better outcomes for plan participants and tapping into a huge market, this may be the best career move you've ever made.
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