NU Online News Service, July 23, 6:23 p.m. – Nationwide Financial Services Inc. wants to help investment advisors use 401(k) Day to sell more retirement plans.
The 401(k) Profit Sharing Council, Chicago, created the day to highlight the importance of retirement savings plans. This year, the council has scheduled the day for Sept. 3.
The day gives advisors a chance to talk to employers about fiduciary responsibility, participant education and plan design, Nationwide says.
Advisors can also use the day to boost individual product sales by holding seminars for plan participants, Nationwide says.
Nationwide is rolling out 401(k) Day tools for advisors.
One tool is a qualified plan market guide, which explains the market for small business retirement plans and offers strategies for approaching clients. The company is also giving away a 401(k) Day checklist, which offers a list of steps advisors can take to build retirement plan business, Nationwide says.
Agents can reach out to the plan participants by helping them cope with the recent market volatility, says Michael Peddicord, a national marketing director at Nationwide.
Agents can start by suggesting that participants “look at history, because, typically, when you’ve had market declines in history and when the news gets terrible and everyone says ?this is the worst market ever,’ the investors who stick with it benefit quite a bit,” Peddicord says.
Peddicord cites the “Black Monday” crisis in 1987, when the Dow Jones Industrial Average fell more than 500 points in a single horrible day, to 2800.
Investors who stayed in “are now looking at a market that’s around 8500,” he says. “Their account almost tripled in value over that 10-plus years period of time. Their patience paid off.”
The time to pare back is when there’s a state of euphoria in the market, Peddicord says, because “there’s a lot of optimism priced into the market.”
Some agents want to know what to say to baby boomer 401(k) participants who are worried about their elderly parents living on shrinking retirement funds. Boomers say they don’t feel their parents have time to wait for a stock market turn-around.
But Peddicord says the oldest 401(k) participants usually aren’t hurt much by stock market volatility.
“Typically, an 85-year-old is not going have a huge exposure to the market,” he says. “By the time they’re 85, they’ll have a small exposure to the market and should be invested in conservative stocks for some growth, but mostly income.”