LIMRA research suggest providing basic training and ongoing support
during a new adviser’s early career can significantly pay off from a sales
growth perspective.
A new LIMRA study finds early career training and mentoring opportunities
for financial advisers pays major dividends down the road.
“Today’s advisers face many of the same challenges as their
predecessors,” LIMRA explains. “Finding
leads, asking for referrals and developing skills to run a business are just as
difficult today as they’ve always been and no less important.”
LIMRA suggests advisers entering the business today face a
different landscape than their predecessors—an environment in which technology,
regulation and client service trends are redefining the ways advisers sell
products and get paid. Despite the industry evolution, new advisers still need
the selling skills and general business acumen of more experienced advisers if
they hope to be successful in the long term.
“As companies invest in technology, they’ve begun to use
modern approaches that build on the strengths of today’s advisers to address
some of the on-going challenges they face,” LIMRA explains. “While this is
happening for some, many advisers are still on their own in key areas.”
LIMRA finds up to seven in 10 young advisers use social
media for their business, yet more than a third of their companies restrict
or prohibit the use of social media. “Seventy-eight percent of young
advisers rated technology tools as important support, yet more than half of
these advisers said they are not receiving enough support in this area,” LIMRA
observes.
Earlier LIMRA research found 75% of “successful young advisers”
have benefitted from a mentor relationship. While some
companies have formal mentoring programs, more than half of mentoring
relationships “developed naturally.”
A helpful infographic from LIMRA, breaking down the technology support advisers want, is available here.
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Global Thinking Can Help U.S. Retirement System in 2016
Hundreds of thousands of frequent flyer miles and dozens of client
meetings across several continents will give a DC industry pro some interesting
perspective on cross-border financial planning trends.
Many of the problems facing the U.S. retirement system today
are far from local phenomenon, says Fredrik Axsater, State Street Global Advisors’
head of global defined contribution.
In a recent interview with PLANADVISER, Axsater suggested three
long-developing themes have clearly crystalized in 2015 as global retirement
challenges—faced by plan sponsors in the U.S. and across Europe and most other
developed economies.
“Often as I attend client and prospect meetings across the
various markets we serve, I hear clients talking about their challenges as if
they are unique,” Axsater explains. “Really it’s the same list of problems we
are hearing about, whether talking with plan sponsors in the U.S., the U.K., Australia
or elsewhere.”
The three problems will certainly be familiar to U.S. industry practitioners,
he adds. These are the difficulty of saving enough and efficiently converting
savings to distribution income; the tendency of non-professional investors to chase performance and sell the portfolio when stock prices
have fallen; and the increased understanding of the importance of good
governance in the face of regulatory and market pressures.
Different retirement systems have started to take different
approaches to solving these challenges, and so the contours of the issues are
playing out differently in markets around the world. Axsater suggests a
helpful framework for thinking about global retirement issues and comparing the
progress of different countries goes as follow: On one side of the spectrum is
the U.S. system, in which individual choice has been preserved at the heart of
the retirement savings effort. In the middle is the U.K., which has started to
move down the path of more mandatory savings (more than in the U.S.) but has
maintained some aspects of individual choice. Finally, on the other side of the
spectrum is the Australian approach, in which most savings decisions have been mandated.
“Thinking about and comparing the progress of these three
systems over the next several years and beyond will be a tremendous case study
for what types of public policy approaches can help overcome the familiar
challenges we have all been talking about,” Axsater predicts.
NEXT: Who does retirement
planning best?
Another commonality across the different markets, Axsater says, is
that with every piece of progress in the retirement savings effort, one can
usually expect a new challenge to emerge.
“So for example, we are all familiar with the fact that in
Australia they’ve gotten very progressive about the retirement savings effort
and are, broadly speaking, at a 9% automatic and mandatory savings rate for most
workers, moving up to 12% over time,” Axsater says. “They have had success in
boosting average balances because of this, but it’s highlighted how much of a challenge
leakage and early withdrawals still are.”
The system still is far from perfect, in other words, partly
due to a lessening of choice.
“The U.S. is facing essentially the opposite scenario,”
Axsater continues, “where people talk about being ‘overwhelmed by choice’ when
it comes to deciding how to save for and spend money in retirement.”
This is one of several reasons Axsater says he is looking
forward to watching and participating in the growth of the U.K. defined
contribution planning market. He suggests the market could easily triple in
size in the next decade, and it will be interesting to see how the middle-ground
approach performs relative to the U.S. and Australia.
Turning to the U.S., Axsater feels innovative thinking is
still needed in the area of encouraging workplace retirement plan savings—and
savings outside the workplace, should it be through individual accounts or even
retirement plans established by the U.S. states for private sectors
workers otherwise lacking coverage. He falls squarely in the camp that feels
state-run plans for private sector workers would benefit existing private market defined contribution
plan providers by bringing more people and more investible assets into the financial system.
“The global lesson from a client service perspective is that
plan sponsors and participants are looking for holistic support, whether on automated plan designs or financial wellness,” Axsater concludes. “We are
starting to see a real shift globally, I think, where plan sponsors are realizing
they have to be somewhat paternalistic about the retirement plan to bring good
outcomes.”