RETIREMENT • LIFE INSURANCE • INVESTMENTS ING Morningstar Advisory Solutions Symposium September 28 - 29, 2010 Chicago, IL PRESENTER NAME TITLE / REGISTRATION ETC C10-015-023R (12/11) ING Research Highlights the Value of a Financial Professional…
Mar 27, 2015
RETIREMENT • LIFE INSURANCE • INVESTMENTS
ING Morningstar Advisory Solutions Symposium September 28 - 29, 2010Chicago, IL
PRESENTER NAMETITLE / REGISTRATION ETC
C10-015-023R (12/11)
ING Research Highlights the Value of a Financial Professional…
For Financial Professional Use Only 2
The ING Retirement Research Institute
• ING is committed to gaining greater insights into the defined contribution landscape, including the many factors that affect how people save for retirement.
• Through research, studies, tools and work done by the Institute, ING is a resource for plan distributors and employers seeking new ways to understand participant behavior so they can help investors achieve positive retirement outcomes.
• The Institute’s web site, among other things, has materials on a variety of behavioral finance topics that can be used including white papers, presentations with talking points, and “lift and load” presentations to be incorporated into educational seminars and other speaking engagements.
• The Institute can be accessed through the web at www.ingretirementresearch.com
• ING is committed to gaining greater insights into the defined contribution landscape, including the many factors that affect how people save for retirement.
• Through research, studies, tools and work done by the Institute, ING is a resource for plan distributors and employers seeking new ways to understand participant behavior so they can help investors achieve positive retirement outcomes.
• The Institute’s web site, among other things, has materials on a variety of behavioral finance topics that can be used including white papers, presentations with talking points, and “lift and load” presentations to be incorporated into educational seminars and other speaking engagements.
• The Institute can be accessed through the web at www.ingretirementresearch.com
For Financial Professional Use Only 3
Driving Thought Leadership through the Institute
ING is a thought leader committed to understanding employees
and finding innovative ways to improve retirement outcomesING is a thought leader committed to understanding employees
and finding innovative ways to improve retirement outcomes
Employ an intense people-oriented focus
Influence public policy
And Innovate meaningful solutions
For Financial Professional Use Only 4
Improve savings rates by appealing to the emotional side of savers and leveraging automatic featuresImprove savings rates by appealing to the emotional side of savers and leveraging automatic features
Develop market-leading products, advisory solutions, and education to guide near-retirees through life’s transitionsDevelop market-leading products, advisory solutions, and education to guide near-retirees through life’s transitions
Develop simpler product solutions in order to expand access to the more than 75 million workers without workplace access to a retirement plan
Develop simpler product solutions in order to expand access to the more than 75 million workers without workplace access to a retirement plan
Behavioral Finance is the study of human reaction and how to improve behavior
The ING Retirement Research Institute’s thought leadership efforts aim to
solve three key societal challengesThe ING Retirement Research Institute’s thought leadership efforts aim to
solve three key societal challenges
Half of all workers don’t
have to
workplace savings
Too few in their
plan or enough
Employees are ill-prepared
for life’s ,
especially retirement
1
2
3
access
enrollsave
transitions
For Financial Professional Use Only 5
Total Agree
77%
69%
66%
60%
44%
39%
Total Agree
77%
69%
66%
60%
44%
39%
Attitudes towards retirement readiness & investing
Based on ING Institute for Retirement Research study “Beyond the Politics and Pundits: What Americans think about the Private Retirement System
People understand the importance of saving, yet do not feel prepared, and don’t feel they save enough
People understand the importance of saving, yet do not feel prepared, and don’t feel they save enough
Regardless of how much they know or do about retirement savings, many
Americans still feel underprepared
• 77% of those polled take an active role in managing their retirement savings.
• Yet, 66% agreed they are not saving enough.
• 60%, or six out of ten, were concerned that they won’t be prepared for retirement.
• Opportunity to improve retirement readiness through education, tools, and advisor guidance
For Financial Professional Use Only 6
When it comes to your financial future…
…do you know where you
stand?
When it comes to your financial future…
…do you know where you
stand?
Tools to educate & engage participants
For Financial Professional Use Only 7
Linking the power of peer comparison with retirement savings
• Web-tool, available to everyone
• Leverages the power of peer-comparison – “people like me”
• Compare how you are doing relative to others like you
• Wide array of financial topics
• Making it easier for people to know where they’re doing well and where they may need to improve…relative to others
• Web-tool, available to everyone
• Leverages the power of peer-comparison – “people like me”
• Compare how you are doing relative to others like you
• Wide array of financial topics
• Making it easier for people to know where they’re doing well and where they may need to improve…relative to others
For Financial Professional Use Only 8
Early results indicate people do care about how they compare to peers
• More than 140,000 visitors have completed the tool’s comparisons
• Referenced in Money Magazine’s 2011 Retirement Guide – “Seven Secrets to a Richer Retirement”, as a tool to try.
• Mentioned in BusinessWeek’s Rethinking Retirement edition as “one of the most up-to-date analyses”
• Top ten innovation of the year honors by Bank Technology News
• User feedback reinforcing the goal of the tool: “I thought I was ok, but see I’m just more behind in (important areas) nice wake up call, now rather than later” 1
• More than 140,000 visitors have completed the tool’s comparisons
• Referenced in Money Magazine’s 2011 Retirement Guide – “Seven Secrets to a Richer Retirement”, as a tool to try.
• Mentioned in BusinessWeek’s Rethinking Retirement edition as “one of the most up-to-date analyses”
• Top ten innovation of the year honors by Bank Technology News
• User feedback reinforcing the goal of the tool: “I thought I was ok, but see I’m just more behind in (important areas) nice wake up call, now rather than later” 1
1 “View expressed here may not be representative of others. Your views may differ.”
For Financial Professional Use Only 9
Our study shows that those who spend time with financial professionals1 tend to…
Save more for retirement…
…have greater investment knowledge…
and are more confident…
1 Note that the terms “financial professional”, “financial advisor”, and “advisor” are meant to mean the same thing and are used interchangeably in this document
For Financial Professional Use Only 10
Nearly one-third of our visitors spend some or a lot of time with financial professionals
Analyze CompareMe database to better understand investor behaviors in relation to working with a financial professional:
• Quantify differences between respondents who use a financial professional and those who don’t.
• Assess differences across topics such as retirement savings, investment knowledge, and retirement outlook confidence.
• Assess differences across demographics such as age, household income, gender, marital status, home ownership, and number of children.
Analyze CompareMe database to better understand investor behaviors in relation to working with a financial professional:
• Quantify differences between respondents who use a financial professional and those who don’t.
• Assess differences across topics such as retirement savings, investment knowledge, and retirement outlook confidence.
• Assess differences across demographics such as age, household income, gender, marital status, home ownership, and number of children.
Have you ever spent time with a financial professional to discuss your investments or plan your financial
future?
Study based on a sample of 14,062 respondents1:
• Represents all respondents who answered the question “Have you ever spent time with a financial professional to discuss investments or plan your financial future”.
• Respondent responses are self-reported and unaudited
Spent no time with an advisor
Met with an advisor once
or twice
Spent some time with an
advisor
Spent a lot of time with an
advisor
41%
28%24%
7%
1 Based on INGCompareMe data collected as of May 24, 2010
For Financial Professional Use Only 11
Demographic breakdown
Time with a financial professional is higher…
1 Represents those that answered “yes, but only once or twice; yes, some time; yes, a lot of time” versus those who answered “no”
…with age …and with household
income
…for men than for women
…for married people than for singles
Early career
18-34
Mid-career
35-49
Pre-retiree
50+
% of respondents who spent time with an advisor1
51%60%
68%
Household Income less than $75K
Household Income more
than $75K
50%
65%
% of respondents who spent time with an advisor1
Women Men
57% 61%
Single Married
53%62%
Time with a financial professional increases…
For Financial Professional Use Only 12
Save more for retirement
• When compared with demographic factors, only household income and age are more significant predictors of retirement savings
• Time spent with a financial professional is more significant than gender, home ownership, marital status, and number of children
• People who spend time with a financial professional also have more spending money after paying for essentials1
• When compared with demographic factors, only household income and age are more significant predictors of retirement savings
• Time spent with a financial professional is more significant than gender, home ownership, marital status, and number of children
• People who spend time with a financial professional also have more spending money after paying for essentials1
People who spend time with a financial professionalsave more for retirement
People who spend time with a financial professionalsave more for retirement
Those who spend some or a lot of time with a financial professional also save on average 2 to 3 times more than those that spend no time with a financial
advisor1 This difference holds true across all income levels2 Represents average values
2x
3x
How much do you have saved for retirement?2
No Yes, a lot of time
Yes, but only once or twice
Yes, some time
spent time with advisor?
1.5x
They save more, and still have more discretionary income
For Financial Professional Use Only 13
Annual Household Income
Add TPS
• At the lowest income levels, spending some or a lot of time with and advisor means nearly double the monthly discretionary income
• Across all income levels, time with an advisor increases “extra” money.
• At the lowest income levels, spending some or a lot of time with and advisor means nearly double the monthly discretionary income
• Across all income levels, time with an advisor increases “extra” money.
Spending time with a financial professional means more spending money
Spending time with a financial professional means more spending money
Approximately how much spending money do you have each month after covering essentials (food, clothing, shelter)?
Spent time with professional?
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
<$25k $25k-$49.9k $50k-$74.9k $75k-$99.9k $100k-$149.9k $150k-249.9k $250k+
None, or once or twice
Yes, some or a lot of time
For Financial Professional Use Only 14
Greater investment knowledge
Which of the following do you think best characterizes your investment knowledge as compared to other people like you?1
1 Answer options are “less than my peers”, “same as my peers”, and “more than my peers”
58% of people who spend a lot of time with a financial professional feel they have greater investment knowledge compared to their peers58% of people who spend a lot of time with a financial professional
feel they have greater investment knowledge compared to their peers
Those who answered “know more than peers”
Those who spend more time with a financial professional believe they know more about investments than their peers, and consider themselves less
conservative investors
Those who spend more time with a financial professional believe they know more about investments than their peers, and consider themselves less
conservative investors
Spent time with professional?
For Financial Professional Use Only 15
Less conservative
Spending time with an advisor can impact risk tolerance.Spending time with an advisor can impact risk tolerance.
• People who spend more time with a financial professional are more likely to consider themselves to be moderate investors than conservative
• People who spend less time with a financial professional are more likely to describe themselves as conservative investors
• People who spend more time with a financial professional are more likely to consider themselves to be moderate investors than conservative
• People who spend less time with a financial professional are more likely to describe themselves as conservative investors
1 Answer options are “less than my peers”, “same as my peers”, and “more than my peers”
25%
48%
27%
16%
60%
24%
Conservative Moderate Aggressive
No time or once / twice
Some or a lot of time
Spending time with a professional can help people understand and accept the potential risk-return trade-off… without turning them into aggressive investors… and they may then
be…
Spending time with a professional can help people understand and accept the potential risk-return trade-off… without turning them into aggressive investors… and they may then
be…
Spent time with professional?
For Financial Professional Use Only 16
More confident about retirement
1 Answer options are “extremely confident”, “very confident”, “somewhat confident”, “not very confident”, “not at all confident”
• 62% of people who have spent a lot of time with an advisor are extremely or very confident about enjoying retirement
• Conversely, only 34% of people who have spent no time with a financial advisor are extremely or very confident about enjoying retirement
• 48% of people think healthcare will be their biggest expense in retirement
• 62% of people who have spent a lot of time with an advisor are extremely or very confident about enjoying retirement
• Conversely, only 34% of people who have spent no time with a financial advisor are extremely or very confident about enjoying retirement
• 48% of people think healthcare will be their biggest expense in retirement
The more time spent with a financial professional, the more a person is confident that they can spend retirement doing the activities they enjoyThe more time spent with a financial professional, the more a person is confident that they can spend retirement doing the activities they enjoy
Those who spend more time with a financial professional are more confident about enjoying retirement and doing the activities they enjoy
Those who spend more time with a financial professional are more confident about enjoying retirement and doing the activities they enjoy
How confident are you that you will be able to spend your retirement doing the activities you enjoy1
No Yes, a lot of time
34%
Yes, but only once or twice
Yes, some time
39%50%
62%Those who answered “very confident” or “extremely confident”
Spent time with professional?
For Financial Professional Use Only 17
Leverage ING tools such as ingcompareme.com to help further engage clients
Use the ING Retirement Research Institute resources to better understand participant behaviors (ingretirementresearch.com)
The more time you spend with your clients the more they trust you and rely on your investment advice
•Focus attention on most valued clients to build lasting relationships•Leverage Morningstar Managed Accounts to help service remaining clients
Conclusions
Our data suggests that people value time spent with financial professionals…
Save to times more money
twothree
Believe they are nearly as
knowledgeable about investing
twice Are significantly
about retirementmore confident
Your hard work is appreciatedYour hard work is appreciated
1
1 Represents the difference between those who have spent “no” time with an advisor and those who have spent “a lot of” time with an advisor
For Financial Professional Use Only 18
Other Institute Research & Ongoing Analysis
• With the passing of healthcare reform, 46% of surveyed participants think they need to save more for retirement.
• this demonstrates that an employer retirement plan is a critical part of retirement investing.
• 36% of surveyed participants are not sure what the effect will be on their retirement savings.
• participants need guidance and education.
Health care reform and Retirement Savings1Health care reform and Retirement Savings1
• When asked at what age you plan to retire:
• 26% of surveyed participants were not sure. Education, guidance, and tools can help such participants better understand their options and when they can expect to retire.
• Of the 50% that provided a retirement age, “65” was far and away the most desired retirement age. Very few individuals expect to retire early.
• Women expect to retire later than do men.
Retirement Age2Retirement Age2
• Respondents were asked “how would you like to spend your time in retirement”
• People who want to be more active save more, versus people who don’t know or responded “other” to the question
• Save more – People who plan to go back to school, volunteer, travel, and enjoy hobbies
• Save slightly less: People who plan on spending time with family
• Save a lot less: People who don’t know or responded “other”
Level of retirement savings versus interests in retirement3
Level of retirement savings versus interests in retirement3
• Based on information provided by users on ingcompareme.com, the three states with the highest median retirement savings are Hawaii, New Hampshire, and Connecticut
• The states with the lowest median retirement savings are Montana, Delaware, and Wyoming
Northeast leads nation in retirement savings3Northeast leads nation in retirement savings3
WA
OR
CA
NV
ID*
UT*
AZ NM*
CO
WY*
MT* ND*
SD*
NE
KS
OK
TX
LA
AR*
MO
IA
MN
WI
IL
KY
TN
MS AL GA
FL
SC*
NC
VAWV
OHIN
MIPA
NY
ME
VT*
NH
MA
CT RI*
NJ
MDDE $20,000 $150,000
* Fewer than 300 observations
1 Voice of Customer Insight: “Now that healthcare reform has passed, do you think you need to save more or less for retirement?”2 Voice of Customer Insight: “At what age do you plan to retire?”
3 Ongoing analysis – preliminary findings
For Financial Professional Use Only 19
Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities.
The opinions, views and information expressed in this presentation are subject to change without notice based on market conditions and other factors. The information provided is not a recommendation to buy or sell any security.
Products and services are offered through ING family of companies. Please log on to www.ING.com/us for information regarding other products and services offered through ING family of companies. Not all products are available in all states. © 2010 ING North America Insurance Corporation C10-0921-010R (09/10)
Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities.
The opinions, views and information expressed in this presentation are subject to change without notice based on market conditions and other factors. The information provided is not a recommendation to buy or sell any security.
Products and services are offered through ING family of companies. Please log on to www.ING.com/us for information regarding other products and services offered through ING family of companies. Not all products are available in all states. © 2010 ING North America Insurance Corporation C10-0921-010R (09/10)
IMPORTANT INFORMATION