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Participant Education Programs Crucial To Producers In Retirement Services

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Participant Education Programs Crucial To Producers In Retirement Services


To succeed in the retirement services business, producers need more than providers that offer a good product. In fact, a top-notch product is merely the beginning.

What they need is access to plan providers that live up to producers expectations of service and support. And, when it comes to participant education, expectation levels are increasing daily.

How do I know? Because Ive spoken extensively with some of my regions leading producers and they are adamant about this issue. Participant education is key to a successful retirement services program. Even very intelligent people who believe they know a lot about retirement can still be very uninformed.

Furthermore, nearly one-third of workers (32%) who were polled by Transamerica in 2001, agree strongly that they would like their employer to take an active role by providing information and advice on how to reach retirement goals.

To address this issue, some producers take a proactive approach. They schedule quarterly new-employee meetings for each client firm. These meetings focus less on paperwork and more on investor education and financial planning reviews.

For instance, the producers use the meetings to educate participants about the components of a 401(k) plan and provide regular reviews of participants financial plans and goals. They also use the meetings to help participants decide if their asset allocation needs rebalancing and to introduce them to the monitoring tools available to them.

Most producers do not be-come as involved in participant education as this, no doubt because they lack the resources to manage a participant education program effectively. For this reason, I believe the onus falls on providers to provide the resources.

There are several things a provider can–and should–do to establish and maintain an effective participant education program. These include the following:

Offer a results-focused program. Its not enough for the producer to just sign up participants. There should be an enrollment process that runs like a results-oriented workshop.

Each activity should be de-signed to help participants decide and take action–to determine how much they should be contributing and what investment mix best suits their objectives and in-vestment temperament. Meetings can be live or virtual, enabling employees at remote locations to benefit equally from the process.

Provide participants with an investment advice feature. The goal is to help them make intelligent investment decisions as their needs change.

To encourage participants to use this feature, the service should be offered at no cost. It should also have scalable complexity, offering beginner to advanced entry points, be-cause all participants are not created equal with respect to investment savvy.

Provide participants with periodic “financial check-ups.” Many participants dont know if their current course of action will deliver the necessary outcome. Therefore, it is the providers responsibility to offer a tool that allows employees to determine if they are on track to meet their retirement needs.

Offer ongoing general education about investments, the market and general economic conditions. This is crucial. Regular seminars can offer a timely “read” of investment markets that helps participants plan effectively for retirement.

Provide quality written communications. From enrollment materials to quarterly newsletters, written communications can make or break our relationships with a participant. Producers in this market stress that they depend 110% on concise, simple materials generated by the vendor.

The products involved are securities, so the information should be pre-approved by the National Association of Securities Dealers. Obtaining this approval is a process that the producers cant do themselves.

The insurer should also provide the producer with in-vestment pieces on risk tolerance and building a diversified portfolio, enrollment materials with information on investment options, and educational modules to reinforce the information.

As I view it, a retirement journey is much like an airplane flight. The flight plan is set forth in the enrollment workshop and confirmed by the advice tool. The annual financial assessment provides feedback in route, so that necessary course corrections may be made. Continuing education keeps the players comfortably informed during the entire journey. And finally, concise written communications and instructions, clearly communicated, ensure that everyone lands in the right city!

is regional vice president-sales for Transamerica Retirement Services. Based in San Mateo, Calif., he heads the companys sales operations from Texas west to California. His e-mail address is [email protected].

Reproduced from National Underwriter Edition, July 7, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.