n the recent past, many financial services organizations offered proprietary products that provided limited choice to clients who in most cases, had limited knowledge and access to information. However, over the past few years, that has all changed. The retirement marketplace has experienced unprecedented growth and participants' needs have changed. In particular:
· Qualified Retirement Plans are now the #1 employee benefit.
· Personal Brokerage Accounts (also known as Self Directed Brokerage Accounts) are one of the most requested plan features today.
· Plan participants have access to unlimited information and demand more control, choice, and flexibility.
· The recent Internet explosion has catapulted this demand to higher levels.
As a result of this tumultuous change, many financial services organizations re-evaluated their limited proprietary product lineups and added personal brokerage account options to their investment rosters.
Personal brokerage accounts enable participants to direct how their money is invested and to manage their investments at their own discretion. Typically, these participants are highly compensated individuals that: have existing relationships with financial advisors or brokers, have stock market experience, understand investment risks, and are comfortable with associated trading/product commissions and fees.
Some financial intermediaries fear that personal brokerage accounts may jeopardize their client relationships and sales. Those brokers that embrace this new investment vehicle understand that it could help them gain access to high net worth individuals, more clients, and preserve existing client relationships.
Because today's participants are becoming increasingly sophisticated and expect more choice, flexibility, and control, intermediaries that understand the value of fostering relationships and positioning extended investment options into their sales arsenal will be positioned to achieve new levels of success.
Kendall Kay is Chief Strategy Officer for Manulife Financial, a financial services company. Through its employees and agents, together with a network of distribution partners, Manulife Financial offers clients a range of financial protection products and wealth management services. This is not intended as investment advice.
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