Small business owners represent a significant opportunity for agents who sell retirement plan products.
Not only do they have substantial assets, but they are also typically so busy running their operations that they welcome the help a knowledgeable investment professional can offer, says Don Jones, national pensions sales manager for Nationwide Financial Services Inc., Columbus, Ohio.
Results of a recent survey commissioned by Nationwide suggest that agents selling retirement plans who do not target the small business market could be ignoring a substantial opportunity.
Respondents of the survey, conducted by independent public opinion polling firm Greenwald & Associates, Washington, D.C., include more than 700 owners of and decision-makers from businesses with 25 to 200 employees.
Among the findings is that fewer than half of all business owners considered more than one type of retirement plan when choosing one for their employees.
“One-size-fits-all plans are often accepted by small business owners because they dont realize that they have choices,” Jones says. “Many times, however, a business owners needs are better met by another type of profit-sharing or money purchase plan than by a 401(k) and nobody ever told them that.”
Jones suggests that investment professionals who work with providers that can customize a clients plan not only offer those clients an additional valuable service, but also gain the advantage of added credibility.
The survey also shows that among business owners top concerns about offering a retirement plan are cost (89%), fiduciary or legal issues (83%); the complexity involved (81%); and the time needed to administer a plan (81%).
Among those surveyed who have fiduciary concerns, 89% are worried about business or personal liability; 88% are concerned with providing enough plan information; and 86% are concerned with investment selection and monitoring.