ESOP Knowledge Can Provide Real Adviser Differentiation

////ESOP Knowledge Can Provide Real Adviser Differentiation

ESOP Knowledge Can Provide Real Adviser Differentiation

When it comes to retirement and business succession planning, survey data shows clearly that small business owners have given relatively little thought to how they’ll shift into retirement or enact an exit strategy. According to Jerry Ripperger, vice president of consulting at Principal, more than 70% of business owners in the U.S. do not have a formal plan for exiting the business—yet very few are taking action today to craft a concrete strategy. Principal Financial Group hopes to make the effort a bit easier with the launch of a new website, Ripperger notes. Among the features, the site highlights employee stock ownership plans (ESOPs) as an important option for advisers and their clients to consider when assessing succession planning needs.

Advisers and business owners are encouraged to visit the website and use it to help guide dialogue with succession plans and future goals. Features include ways to help business owners see the value of a succession plan; answers to top questions advisers and business owners have about ESOPs; surveys to assess if an ESOP is the right approach for a client or potential client; ESOP benefits for advisers, business owners and their employees; and, naturally, access to Principal succession planning and internal ESOP expertise.

As a part of continued commitment to succession planning with ESOP education, Principal will roll out a series of activities in 2018 including blogs, event sponsorships, marketing materials, and regular updates to the new website. Asked to talk about the motivation behind the new website, Ripperger tells PLANADVISER the firm’s ESOP practice has been growing steadily over the years. “You will see that many of the service providers in this market only touch ESOPs, whereas we obviously have the broader connection to the whole retirement planning industry, including defined benefit, defined contribution and non-qualified plans,” Ripperger notes. “The ESOP conversation is interesting because it is a space where you can have the adviser, the ownership, and the employees all working together to find a way meet their collective objectives when it comes to benefits and retirement readiness for everyone.”

He urges readers to consider some sobering statistics: More than a third (35%) of business owners surveyed by Principal anticipate exiting their business within three years, and yet 72% of business owners say they do not have any formal succession plan in place.”