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June 28, 2001 at 08:00 PM
When people retire, they often move their defined contribution assetsin 401(k)s and 403(b)s and the like–into a rollover individual retirement account or some program other than that of the current retirement plan provider.
Frequently, these assets “come up for grabs.” That is, unless the agent or rep has established a prior connection with the individual plan participant, those assets will likely leave the agent and original plan provider forever.
Therefore, it can be crucial for agents and plan providers to learn how to get access to the participants–at the worksite and before the money moves. This can be key to capturing or retaining defined contribution assets.
For the sake of departing employees, such access can also be crucial because early contacts with the agent can give workers the information and advice they need to make informed decisions about where to put their retirement money.
Here are just a few of the benefits of being proactive in this way:
–The agent can catch the employee’s attention early and at the appropriate time to plan for retirement.
–In the mind of the employee, there is often the “implied endorsement” of the employer.
–If the agent’s firm is the current defined contribution plan provider, there is a clear opportunity to build upon and enhance an already-established client relationship.
Lets take a closer look at the factors that influence decisions at the worksite–first from the consumer’s perspective and then from the employer’s.
Most consumers roll over, or plan to roll over, assets from their retirement plan when they retire, placing those assets with a different investment management company than the current plan provider.
For the producer, this generates an opportunity to serve a need–and also to capture these assets. Thats because consumers get little assistance with planning for asset and income management during the period after they retire.
Thus, at the very point when retirement assets have reached their peak levels, consumers are not getting the advice they need.
From the consumers viewpoint, their current retirement plan providers are largely “invisible,” having made little attempt to build an ongoing relationship with them during the savings period.
