Back to School Means More Opportunities for You and Your Clients

October 1, 2015

What types of opportunities does going back to school mean for financial advisors?

This year marks my son’s first day at school. He’s just under two years old, but my wife and I felt that getting him into a school setting (it’s actually a “pre-preschool”) would provide him a ton of opportunities that he wouldn’t get if he stayed home. Not only would he be able to meet new friends and learn how to take instructions from adults who aren’t his parents, but he would also become accustomed to the kind of “structure” that comes with going to school, setting him up for success in the future. Having said all that, what opportunities does going back to school mean for financial advisors?

Our kids going back to school means educators and other school employees, along with their retirement plans (typically a 403(b)/tax-sheltered annuity), also "come back." And with an employee-participation rate that is generally lower (as compared to 401(k)-participation rates), this retirement plan niche is largely an untapped market for advisors.

This low participation rate is mainly because school districts are not very engaged in their supplemental savings plans. A possible solution would be for advisors to meet with school administrators and superintendents to educate them on the benefits of their 403(b) plan, such as:

  • Educators are better prepared for retirement and are less likely to work beyond full retirement age (which can be very expensive for school districts). 
  • Helps educators save for retirement with pretax dollars.
  • Accumulates tax-deferred contributions and earnings.
  • May reduce current taxable income.

To get started, an easy way to approach a 403(b) plan is to do the following:

  1. Review Your Book of Business for Clients Working in K-12 Public Schools: Pacific Life does not currently accept new 403(b) plans from “non-public schools” (e.g., non-profit organizations) nor from ERISA 403(b) plans. 
  2. Confirm Pacific Life Is an Approved Product Provider: Similar to many 401(k) plans, Pacific Life must be an approved product provider for the 403(b) plan. Pacific Life can offer 403(b)s on both our mutual funds and annuities, but this does not mean both are approved through the plan. Please check with the plan to confirm availability. 
  3. Set Up an Enrollment Meeting: After availability is confirmed, plan to set up an enrollment meeting at the school, teaching clients the importance of saving for retirement and helping them determine which investment/product may be right for them.

Entering into a new arena of retirement plans may be a little overwhelming, but luckily for you, Pacific Life offers educational resources via different marketing materials, your consultative wholesaler, and our Retirement Strategies Group.

If you have any questions along the way, please feel free to contact the Retirement Strategies Group at (800) 722-2333, ext. 3939, or send an e-mail to RSG@pacificlife.com.

Picture of Chad Goforth

Chad is currently an Attorney Consultant for the Corporate Law Department at Pacific Life. Previously, he was a Senior Retirement Strategies Consultant, bringing more than 13 years of industry experience to his role and providing technical insights to our sales team and registered representatives on a variety of issues including IRAs, qualified plans, annuities, and estate planning issues.

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