Press Release
Small-Business Owners Critically Under-Educated About Retirement Planning
Successful business owners need more balanced retirement planning help
COLUMBUS, OH, September 6, 2002 -- America's small-business owners realize their need for help with taxes, but may not understand how much help they need preparing for retirement. This is a key finding from the 2002 Nationwide Financial Survey of High-Income Professionals.
Business owners are more likely than other affluent professionals to feel that tax advice is an important service provided by a financial advisor (65 percent versus 50 percent). They also were more concerned about planning for income management in retirement than the total affluent group (72 percent versus 67 percent).
"Retirement is an especially key concern for business owners because much of their net worth is wrapped up in their business," said Brad Sorensen, associate vice president and small-business market manager for Nationwide Financial. "They're often so distracted with the day-to-day pressures of running a business that they fail to get engaged in retirement planning. Often they know little about the financial planning solutions that could provide financial security in their retirement years."
Compared to total respondents in the survey, business owners viewed themselves as less knowledgeable about various financial and retirement savings products:
Respondents felt very
knowledgeable about: |
Business Owners |
All respondents |
| |
|
|
| 401k accounts |
54% |
67% |
| individual retirement accounts |
55% |
61% |
| mutual funds |
54% |
60% |
| stocks |
46% |
54% |
| bonds |
27% |
35% |
| variable annuities |
14% |
21% |
| fixed annuities |
19% |
24% |
The third annual Nationwide Financial High Income Survey, conducted by Mathew Greenwald & Associates, a Washington D.C.-based independent polling firm, surveyed 500 people with annual household incomes of at least $150,000 per year. Respondents were younger than age 60 and were either engaged in financial planning or intending to be involved in it in the near future. Respondents were attorneys, medical doctors, corporate executives or small-business owners (including self-employed individuals).
When asked to rate their retirement preparedness on a scale of one to ten (where ten means completely prepared), only 56 percent of business owners said eight or higher. That's slightly less than the rest of the survey respondents.
According to the survey, accountants are a top-of-mind source for financial planning help when it comes to tax planning (67 percent). And business owners are more likely than any other high-income professional to use an accountant for financial planning help (66 percent versus 47 percent).
"Small-business owners reported tax advice as a top service they need from a financial advisor, second only to income management in retirement. Financial advisors should recognize these qualities in their business-owner clients (and prospects) and do more to provide service that will help meet this increasingly critical need," said Mathew Greenwald, president of Greenwald & Associates.
Business owners are also changing sources of advice more frequently, with 30 percent having never changed advisors. Forty-seven percent of the other professionals say they have never changed main sources of advice.
"Business owners should seek out advisors who can help provide them a comprehensive financial plan, one that can meet their needs through the entire life cycle of their business," Sorenson said. "Successful owners have the opportunity to take an approach to their own retirement plans that is equally diligent to the approach they take in running their business."
Nationwide Financial Services, Inc., based in Columbus, is a leading provider of annuities, life insurance, retirement plans, and other financial services for individuals and institutional clients. The major operating subsidiary of NFS is Nationwide Life Insurance Company, the country's seventh-largest life insurer(a).
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