DC Plan Providers Advisors Have an Opportunity to Retain More Assets of Participants Who Retire
CHESTER, NJ, November 10, 2011 -- According to the Third Annual 2011 DC Participant Experience Study by KK & Company and Greenwald and Associates, this opportunity has been created by a confluence of factors, including:
- Forty five percent (45% ) plan to roll their account value to another company when they retire.
- Only half (48%) have worked with a financial advisor on retirement planning.
- Two thirds (65%) do not have a written financial plan.
"The main reasons for rolling money out is the relationship the participant has with another financial institution or advisor," said Matthew Greenwald.
Minimal Involvement With Their Retirement Plan
The involvement of most participants in their retirement plan can best be described as reactive. Sixty-seven percent only review the plan balance when it is sent to them and another 5% do not even look at the communications they receive about the plan. Only 17% go online at least monthly to make changes, if needed.
Older Participants Have More Assets for Retirement
In addition, the major increase in the number of participants who will retire with significant assets over the next decade and more renders this opportunity worthy of attention.
Near-Retirees (ages 55-70) have more assets to invest than the "average" participant:
- 21% have $50,000 to $149,000
- 17% have $150,000-$249,000
- 18% have $250,000-$499,000
- 10% have more than $500,000
"According to US Census Bureau data and projections, our old population pyramid is shifting rapidly," according to Kendall Kay. "In 2000, 32 million of the 320 million US population were ages 55-69. By 2010, this segment had grown 50% to 47 million! This growth will continue and by 2020 the estimate is for 59 million people in this age band, effectively doubling in just two decades."
The data in this survey and study clearly points to five areas that need enhancement if providers are to maximize this opportunity:
- Participant relationship management
- Pre-retirement education and planning
- Retirement income education and management
- Development of new products that deliver dependable retirement income and guaranteed lifetime income
- Enhanced website functions
About Mathew Greenwald Associates
Mathew Greenwald Associates, Inc. is full service market research Company that specializes in serving the needs of the financial services industry. We have conducted customized research for more than 200 organizations. Greenwald Associates is a member of a Research Center, in partnership with RAND, Dartmouth College, The Wharton School, Harvard University and others, that is conducting research for the Social Security Administration to help enhance the financial literacy of Americans. For more information please go to: www.greenwaldresearch.com
About KK & Company
KK & Company provides strategic planning, marketing, and business development for financial services and health care organizations. Creating customized solutions that deliver a unique and profitable competitive advantage, KK & Company's specialized knowledge of wealth accumulation, retirement income, wellness and employer markets help companies understand and meet their customers' needs. For over two decades, Kendall Kay has researched, tested, developed and monitored educational strategies, products and tools for over two million 401k participants at different Defined Contribution providers, as well as for many clients. For more information please go to: www.kaykayco.com
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