Small-Business Market For Retirement Plans Is Wide Open
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"Small businesses are the best prospects in the world," says Sid Friedman, president of Corporate Financial Services in Philadelphia.
For instance, he says "business owners are aware of retirement plans, but no one has sat down and talked with them about it.
"They don't know the differences between 401(k) plans and SIMPLE plans, defined benefit and defined contribution plans," Friedman continues. 
"They've read about it in the papers, but they don't understand them."
A recent report on small businesses from LIMRA bears out a lot of what Friedman says, revealing that a high percentage of those smaller businesses surveyed have no retirement plan in place at all. (See chart.)
As part of the study, businesses were asked to rank employee benefits in order of importance. The study showed that 71% of those companies surveyed already have what is, in their opinion, the most important benefit: health insurance. Retirement plans, judged the second most important benefit, are not as widely available.
At firms with 9 or fewer employees, the study shows that only 37% have some form of retirement plan. While this group has the lowest availability of retirement plans, it encompasses 83% of the study's population.
Nevertheless, the research indicates that there is high interest in retirement plans among small-business owners, making this an excellent opportunity for agents in this market.
The report notes that with the aging workforce, demand for retirement plans is expected to increase.
At Guardian Life Insurance Company, agents offer solutions in four problem areas for business owners, says Leon Wynter, manager of public relations for Guardian in New York. "Recruiting, retention, reward, and retirement. We use a combination of insurance and investments to compensate key employees during their tenure or retirement," says Wynter.
In addition to highlighting the opportunity for employee benefit retirement plans, the report also shows there is opportunity for business continuation planning.
