Only 158 million zombies, vampires, werewolves and other
monsters will prowl our nation this October 31, according to the National
Retail Federation’s recent Halloween Spending Survey.
The number is down from the survey high of 170 million
people celebrating Halloween in some way last year. Those who do fete the day will also
trim their budgets: The average celebrant expects to spend $75.03 on décor,
costumes, candy and fun, down from $79.82 last year.
Overall, average spending on Halloween has increased 55%
since 2005, with total spending estimated to reach $6.9 billion this year.
According to the early-September survey of 5,290 consumers,
44% of people plan to dress up and will spend a total of $2.6 billion on
traditional and awe-inspiring costumes. Consumers will shell out $1.04 billion
on children’s costumes and $1.22 billion on adult costumes.
Not all monsters have two legs: Fourteen percent of those celebrating
will spend some $330 million on costumes for pets.
Celebrants will spend $2.08 billion on candy and $360
million on greeting cards. Halloween ranks second only to Christmas in terms of spending on decorations, and Americans plan to drop $1.96 billion on skeletons,
fake cobwebs, mantel pieces and other festive decorations.
One-third (33%) began shopping before September 30.
An additional 67% of consumers are shopping in October: Forty-four percent will begin in the
first two weeks of the month, and 24% will wait until the final two weeks.
One-third (33%) will search online for costume ideas;
another third (33%) will look in a store for new ideas; and a fifth (21%) will
seek advice from friends or family. Additionally, 14% will check Facebook for
inspiration, and 4% will review blogs. Nearly one in 10 (9%) will scour
Pinterest for costume ideas, up from 7% last year. Of those buying or making
costumes, the average person will spend $27.85, similar to the $28.65 spent
last year.
Top Halloween activities are handing out candy (72%), decorating
the home or yard, or both (47%), and carving a pumpkin (44%). About a third of
Americans take their children trick-or-treating (32%) or attend or host a party
(31%). About 20% of people visit a haunted house.
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Studies estimate 127,000 start-up defined contribution plans will be
implemented through 2016.* Why the surge of growth? Growing companies recognize
retirement
plans offer many benefits for the business, the employees and the owner—including
attracting and retaining talent, building and diversifying business owners’ personal
assets and helping employees secure retirement peace of mind.
This creates a
tremendous opportunity for financial professionals who can sell and service
small plans efficiently. Each sale can help to:
Create
a wealth of cross-selling
opportunities; and
Offer
access to highly qualified
prospects, including business owners and executives.
Despite the
potential, this market is relatively
underserved. More than one-third (37%) of small business
owners currently don’t use a financial professional, according the latest Principal
Financial Well-Being Index: Business Owners.
3 steps to success
We’ve worked with
many financial professionals over the years who have built profitable
businesses in the small plan market. Some the best practices among those who
are successful in the small retirement plan market include:
1.
Keep your prospect pipeline full.To market retirement plans efficiently to
small employers, it’s important to keep your prospect pool full. An experienced
wholesaler told me recently, “I work with a two-person team that has sold more
than 50 plans in the past five years. Most have less than $5 million dollars in
assets. They have a very rigid, thorough follow-up process. They stay in front
of everyone they contact until they win the business or the prospect refuses to
respond. They believe a ‘no’ is not a ‘no.’ It is just a ‘not right now.’”
Where can you find new prospects? Leverage centers of
influence (such as CPAs, attorneys, brokers and commercial bankers), network
through social and professional organizations, obtain leads from current clients and research Form 5500 data.2. Develop an octopus
practice. An
octopus practice has many diverse sources of revenue. Small business retirement
plans offer incredible cross-selling opportunities. For every dollar in a
retirement plan, there are many more in
a prospect’s net worth—college funds, home equity, personal accounts and IRAs.
As
you work with small businesses, make sure you actively look for cross-selling
opportunities. While prospects develop, focus on generating additional sales by
helping meet the needs of current small business clients. The opportunities are
significant.
3.
Marshal your resources. The retirement plan
market is complex and highly regulated, so it helps to have business associates
with specialized expertise. Leverage the expertise, tools and resources that
are available from third parties, such as plan service providers and third-party
administrators (TPAs).
These
associates can help design, implement and provide administrative services for
small business retirement plans, as well as provide tools and resources that
help you support and service your small business clients. These relationships
are essential to working efficiently.
Grow—and
diversify—your practice with small retirement plans
The small plan market has remarkable potential for financial professionals
who employ best practices and work with business associates with complementary
expertise. Financial professionals who tap into this growing market—and work
efficiently in it—have opportunities to build strong, profitable practices with
diversified revenue streams. Resources in Principal Financial Group’s Small Plan Resource Center https://secure02.principal.com/forms/retirement/small-market/success.htm
can help.
Tom Donnelly is
regional vice president of sales at Principal Financial Grouphttp://www.principal.com/index.shtm. Donnelly is responsible for the West region of the
United States and leads a team of professionals who consult with financial
professionals and their retirement plan clients. Donnelly is a veteran of the
retirement business, joining The Principal in 1985.
*Firm
growth projections are based on U.S. Small Business Administration (SBA) and
Economy.com calculations, which are based on data provided by the U.S.
Department of Commerce and Bureau of Census; market penetration rates are based
on 2010 Spectrem Group calculations and internal projections based on historic
growth rates.
NOTE: This feature
is to provide general information only, does not constitute legal
advice, and cannot be used or substituted for legal or tax advice.