In my last post, I covered changing the rules of the game to gain an advantage over your competition. Today, I’d like to start with a history lesson. During the Revolutionary War, a group of individuals living in British occupied New York City helped General Washington gain a strategic advantage over his enemy by developing an elaborate spy network.
They created an intricate set of codes and messages using invisible ink that could only be decoded by a tiny group of Washington’s men. The process was so successful that someone reading a message would never be able to determine if it was a code or not – nearly the entire real message was right in front of them – but written in invisible ink.
How does this history apply to you? The conversations you have with your clients about retirement readiness. (I know you’re thinking “did he really just make that connection?”…and the answer is yes. I did.) When you present your clients with concepts and ideas, are they looking at the message, but the real message is coded in invisible ink?
The Principal® recently conducted research around retirement readiness and the role you (financial professionals) play.
- 85% of plan sponsors agree that they need to spend more time helping participants plan their retirement.1
- 50% of the same plan sponsors are very concerned about participants’ probability of achieving an adequate and secure income in retirement.1
- Nearly 70% expect their financial professional to be aggressive promoting outcomes-focused retirement incoming planning.1
What do all of these numbers add up to? Roughly translated, the code says there is still a lot of runway left with the topic of retirement readiness. Here are just a couple of thoughts on how you can help your clients and prospects decipher the code:
- Plan Diagnostics – Does the prospect or client know where they’re at today? How many of their employees are on track? What does it look like for highly compensated and non-highly compensated? What might future costs look like for those employees who can’t retire? How can you manage costs? It’s probably a safe bet that most plan sponsors have not diagnosed where their plan sits today. You can’t see the invisible ink, unless you have the key (aka, the facts and data) to unlock the code.
- Simplicity – Have you ever heard of the curse of knowledge? The financial services industry tends to suffer from it. We present topics in detail that only our peers understand and appreciate, not our clients. That’s great if you are developing an un-crackable code, but not if you are consulting with your clients. When you are bringing the concepts needed to make retirement readiness work, make sure you give them a simplified way to decipher it. Make it real for them – make it simple to see the path to get their employees on track. What’s the first step they can take? Not 5 decisions to make, what’s the first and most important?
- Measurement – Remember two things: 1) you can’t address what you don’t measure and 2) it’s a process, not an event. Along the way, you’ll need to tweak it. For the Washington spy ring, they had to make changes to the code, to the delivery route, to the people to ensure the message got through. Make sure you use reports that measure the results. In a study that I took part in from the Retirement Advisor Council we discovered the majority of sponsors who received a plan-level retirement readiness report have taken action to enhance outcomes.
Be sure to check out principal.com/retireready to access tools and resources to help ensure your clients aren’t missing the message when you talk about retirement readiness.
1 Brightwork Partners’ Supporting Retirement Savings Survey, September 2013.
The subject matter in this communication is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.
© 2014 Principal Financial Services, Inc. │ PQ11576H │ t14052201lv