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Retirement Planning > Retirement Investing

Capitalizing On Boomers' Retirement Needs

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The U.S. Census Bureau released information in 2005 telling us that the first of more than 77 million baby boomers would begin retiring in 2006. USA Today recently spotlighted the first boomer to apply for Social Security. The enormous airplay being given to the boomers entering the retirement phase of their lives has given rise to more frequent discussions of how the wealth they have accumulated will be distributed in retirement.

For many years, the financial industry focused on educating clients on the importance of retirement planning, with a focus on accumulation. Driven in large part by the boomers’ stage in life, that focus has shifted to knowing more about how these accumulated funds will be distributed to provide for their lifetime income needs.

In the variable annuity marketplace, the competition is lively. New products and new benefits are being launched at a pace that may have some heads spinning. For example, a recent study by Soleares Research found that through Nov. 21, 2007, 35 companies filed 45 new guaranteed lifetime withdrawal benefits with the Securities and Exchange Commission.

These two factors alone–new, innovative products and benefits, and the speed at which they are being launched–are cause for more and better training and education. Add product complexity to the mix and you have a critical need for learning.

As leaders in the variable annuity marketplace continue to create innovative products and optional living benefits to help financial professionals meet the retirement needs of their clients, the top product manufacturers are finding that they must lead through education.

A new approach to educating financial professionals

Contrary to the needs identified earlier, many firms are moving away from providing continuing education programs or offering only online programs, leaving behind stacks of cards that provide continuing education credits online through a third-party provider. Market leaders recognize the opportunity that lies in educating financial professionals by building on proprietary programs, like continuing education (CE).

These programs offer courses led by a wholesaler or other industry financial professional. LOMA, a financial industry education provider, reported that leading insurers supported in-person CE because it gave them “control of the content, the quality of the instructor, and the participants.”

Financial professionals are finding CE programs offered by wholesalers to be valuable as an opportunity to ask questions and interact with knowledgeable representatives. And, as financial professionals continue to tell us that keeping courses current and topical is not only important, but necessary to keep their attention and drive attendance, companies offering CE programs are seeing a gradual increase in attendance year over year, reflecting the value that educational and training programs like these bring to the marketplace.

By offering a robust selection of courses in key categories like products and benefits, contract structure, investment fundamentals, retirement planning strategies and other industry topics, market leaders can educate financial professionals on new and emerging trends, enabling them to capitalize on the surging need for retirement-focused investment planning.

Partnering with marketing

Today’s manufacturers are also creating a “complete package” for the financial professional. Marketing teams craft valuable educational brochures, flyers and client seminars on financial concepts, products and benefits that complement existing CE courses. Advisors reference these tools to learn more about the concept or product, and to help educate the investor. A strong sales desk can help follow up with attendees to address their individual needs.

Some companies are taking bold steps in this direction, enlisting the support of some of the nation’s top academic institutions to provide financial professionals with an opportunity to learn from investment and retirement experts who serve as faculty for some of the most prestigious business schools in the country. For example, 150 financial professionals attended the first-ever Retirement Strategy Program through The Wharton School at the University of Pennsylvania in October.

The program, which provides financial professionals with extensive training in retirement income strategies, builds on a business model to help address the risks of investing during the 5 years before and the 5 years after retirement. Focusing on a 3-pronged model of retirement risks–sequence risk, longevity risk and behavioral risk–the course reviews conventional wisdom around managing these risks and explores new perspectives that take into account the changing landscape, particularly in regards to annuity guarantees.

Beyond efforts like these, marketing departments can provide concept-oriented research and materials to support efforts that engage advisors in understanding factors that affect investor behavior and attitudes about investing.

Participation in educational efforts by senior leadership

Senior executives can add another dimension to educational programming by becoming involved in the process. Road-warriors who meet face-to-face with hundreds of advisors across the country for several months of the year usually benefit from these opportunities as much the participants.

Throughout the year, advisors can attend due diligence meetings to learn more about products, investment platform, advanced marketing topics, hedging strategies and listen to featured speakers. These meetings provide opportunities for advisors to meet with industry leaders in small group sessions and exchange ideas, ask questions, and learn more about market leaders.

Where do we go from here?

Learning plays an important role in our business and the industry’s top leaders are taking it seriously. As manufacturers continue to launch new products and benefits at break-speed, the need to learn about them is obvious and the demand will persist.

To maintain a full slate of knowledgeable advisors selling the new generation products and services requires companies to enhance continuing education programs, offer more “complete packages” to advisors and explore more distance learning and online product training. As the innovators continue to dominate the marketplace, a heightened focus on training and education is a business imperative moving into 2008 and beyond.

Eva Vitale is vice president of the Learning Organization at Prudential Annuities, Shelton, Conn. You can email her at .


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