Sales Opportunities Within The Group Retirement Market CAIFA Ontario School 2001 Daryl Diamond CFP CLU CHFC Diamond Retirement Planning Ltd.

Sales Opportunities Within The Group Retirement Market

CAIFA Ontario School 2001

Daryl Diamond CFP CLU CHFC

Diamond Retirement Planning Ltd.

Disclaimer

Two Aspects

• Our approach to prospective employers

• Making it work

Two Tales

1 The Generous Volunteer

2 The Confident Loser

Our Objectives

To deliver interactive programs of financial and retirement education in Canada’s workplace

To encourage employees, through these workshops, to take an active role in their own financial affairs

To accomplish the above through a national network of qualified advisors

How These Programs Were Written

Information in a logical progression Educational and insightful With neutrality Without product or institutional bias Encourages exploration of alternatives Encourages attendees to take action

Issues To Address

The need from the corporate perspective

The need from the employee’s perspective

Choosing a provider

Funding the program

The Need From The Corporation’s Perspective

What are some of the reasons you would consider implementing an educational program within your organization?

What are some of the obstacles you face in providing such a program?

The Changes To Corporate Retirement Programs

Move away from Defined Benefit (DB) pension plans to Defined Contribution (DC) plans

Move from pension to Group RRSP combined with pension and /or DPSP

Availability of new investment options, many of which are variable, and chosen by plan members

Employee Retirement Income Security Act (ERISA)

Section 404(c)

Directs the employer to provide;

Reasonably diversified investment options Flexibility for employees to make changes

to investments throughout the year Proper information on investment options

and investing

ERISA Clarifications

“We will encourage employers to provide pension plans and help teach workers to plan and save adequately for retirement”

U.S. Labor Secretary

Alexis M. HermanNovember 1997

Components In Your Retirement Programs

ConsultantConsultant InvestmentManager

InvestmentManager

Plan actuaryReportsProvides quotes at,

TerminationRetirement

Manages investmentsDistributes contributionsProduces statements

We Provide What Is Missing

Education and insight Communication An accessible resource Recommendations based on the total picture Positioning, structure and ongoing counsel The follow through to make things happen

Benefits To The Employer

Increased productivity Increased understanding and participation

in corporate benefit programs Increased employee retention, loyalty,

morale - good will / appreciation Increased preparedness for employee

retirement

Older Employees

Highest end of the pay scale Employer retirement contributions are high Most expensive benefit premiums Most vacation days

Providing financial education at a younger age allows for better financial decisions and puts employees in a position to retire earlier

The Need From The Employee’s Perspective

Changing Factors

Changing FactorsMale Age 65

Income FactorsYear Life Expectancy

7.5 Yrs

10 Yrs

14 Yrs

1975

1985

1965

Today

2010

17.5 Yrs

20 + Yrs

Only a few retirement years to fundCPP commences

Appreciating real estate valuesHigh nominal interest ratesExcessive taxationExcessive Government borrowing

None of the above apply in the same manner

The Need From The Employee’s Perspective

Changing Factors

Considerations For Future Retirees

Additional Considerations

Issue

Retirement Age

Life Expectancy

Lifestyle Expectations

Taxation

Inflation

Family Complications

Wealth Transfer

Forecast Impact

_______ _______

_______ _______

_______ _______

_______ _______

_______ _______

_______ _______

_______ _______

earlier

longer

better

greater

present

possible

important

more

more

more

more

more

The Need From The Employee’s Perspective

Changing Factors

Considerations For Future Retirees

Realize they need it, they want it, but do not know where to go to get it

The Reality

The RealityCIBC 1998

72% do not have a financial plan even though 48% use a “financial advisor”

21% have not started to save for retirement 51% have saved less than $30,000 33% have saved more than $100,000 7% have saved more than $400,000 62% expect to work to age 65out of necessity

Source: Financial Post

The Program

A workshop that consists of seven to nine hours

An optional one on one consultation

The Four Levels of Adult Learning

1. Awareness of an issue

2. Understanding the issue

3. Realizing the impact

4. Recognizing the steps to take

Total Planning Includes

Looking at the whole picture Understanding, and full participation in,

company programs Implementing accumulation strategies

outside of employer programs Tailoring plans and strategies to each

situation

Many Pieces To the Puzzle

Budgeting Accumulation and income strategies Investment strategies Education planning Tax planning Risk management Estate planning issues

What Level Of Service ?

Ongoing Service

Implementation

Planning

EducationEducation

Stages of Employee Election

Decision to attend workshop Decision to complete information forms Decision to meet for consultation Decision to establish relationship Decision to implement recommendations

Use of a “Waiver Form”

Selecting A Financial Education Provider

Do not provide this service “in-house”

1- 800 numbers from investment manager

Fee based provider

Full service provider

How Should This Program Be Financed ?

Workshop is a low-outlay, high impact benefit

Corporation provides as a benefit Cost shared with employee Deducted against expenses of plans Appoint us as “Agent of Record” on your

plans

An Invitation ...

Allow us to provide a sample workshop, to a selected group of your people, pension committee, employee liaison group, etc.

If at least 70% do not find it a positive experience, we will refund the cost of enrollment

Client Sources

• Existing Groups - What level of service?

• Where do your individual clients work?

• Pairing with a group producer

• Large corporations and government agencies with no servicing mandate

• Open sessions

So What Are The Results ?

• How many come in ?

• Why is this efficient ?

Feedback Sheets & Questionnaires

Additional Opportunities

• Referrals from H.R.• Consolidation• Lunch and Learn• Special Events• Company Newsletter• Pay Envelope Stuffers• Company E-mail• Downsizing

What Do You Need ?

• Educational program to offer

• Access to group situations

• Membership in CPBI, CAPP and local H.R.

organizations

• Great work ethic

• Organization and admin assistance

• Patience

www.personalfinanceseries.com

Find out more at ...

Any Questions ?