Making money for the firm while doing good for clients should be the objective of everyone in the financial services business.
Years ago, I attended a presentation by Mervyn King, a former governor of the Bank of England. He observed that many people in client-facing roles in the financial services industry are focused on making as much money for themselves as possible.
He felt they should instead consider that they have a privilege when entrusted with a client and their money, focusing on how to give the best advice possible.
When a benefit plan member becomes an individual client of the parent company, there is an opportunity for everyone to benefit.
Surveys indicate employees want financial literacy education.
According to a Bank of America report, 76% feel their employer should be providing it. The Harvard Business Review puts the number at 77%, and PNC found that 80% of employees would stick with an employer providing financial literacy education.
OK, a need has been established. You can also get plenty of medical advice online, but when people identify a serious need, they want face-to-face advice.
This can be a transition point to move an employee from their relationship in a group benefits plan to becoming an individual client of the parent financial services firm.
How can this happen? Let's consider four scenarios:
Retirement Planning Classes
These can be conducted a couple of years before employees retire. They can be conducted onsite and feature a structured curriculum.
Although this sounds like intensive coursework, it could focus on different aspects of financial planning or retirement planning.
One session might address accessing Social Security. Another could focus on Medicare and supplemental insurance.
Still another session could address how much money you will likely need on an annual basis in retirement.
There could be a session talking about life insurance and annuities.
Each of these components could identify online resources, yet also offer a path to transitioning to working with an individual financial advisor.
Retirement Plan Rollover Education
One day you're an employee and the next day you're a retired employee.
In other circumstances, you might be a downsized employee, someone taking early retirement or a person who left the firm to take another job elsewhere.
In all these circumstances, the former employee has retirement plan assets at the firm.
What happens to them if they do nothing?
How can they be rolled over to another custodian or into their new employer's retirement plan?
Can they be moved into an individual retirement rollover account?
Although employees can be shown how to do their own research, the presenter might mention a few financial services firms where this relationship already exists.
Individual Investment Education
Let's assume you have some employees who are proactive in utilizing company benefits to their full potential.
They're great employees and are climbing the ladder, earning more and now having disposable income.
They want to learn about investing and prefer not to be a "walk-in" at a financial services firm.
They want to feel they are valued as a company employee.
You could have a referral process in place. Banks have a similar process for referring depositors interested in investing to the financial services side of their firm.
When Senior Executives Approach Retirement
The leaders of the firm are expected to focus on doing their jobs.
This can often be a 24/7 responsibility.
They need to hop on a plane to put out fires in divisions located elsewhere.
They need retirement planning help, too.
Some firms bring in a dedicated retirement consultant. This is often a person who speaks the "senior management language" and bonds with the executive. If the executive has a complex retirement package, they know the details. The bond might be so strong that the executive chooses to retain the retirement consultant as their retirement advisor when they leave the company. The assets transfer to their firm. Perhaps assets with other financial institutions are centralized, too.
What It Means
Clearly, when you're providing advice to anyone at an employer, it's important to make the advice available to all employees.
It's also important to give employees enough information to make decisions on their own or choose their own advice provider outside the firm.
Bryce Sanders is president of Perceptive Business Solutions. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, is available on Amazon.
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