The New Age of Selling and Educating, Part 1

Editor’s Note: This is Part I of a two-part series.

There isn’t a week that goes by without an advisor commenting to me how the K-12 403(b) market has changed in the last few years. That transformation has only accelerated as a result of the COVID-19 pandemic. For years, far too many school district employees have decided to participate in a 403(b) plan as a result of speaking with a co-worker or meeting a vendor in the teacher’s lounge. However, K-12 employees—and more specifically younger individuals entering this profession—have begun to take a closer look at the retirement benefits offered through the state and how, and if, Social Security benefits may be available to them. 

The advisor community has done an admirable job educating public school employees on Social Security in the last several years and has clearly begun to open eyes. It would be safe to say that just five years ago, a large percentage of public school employees who work in one of the 15 states where they don’t pay into Social Security had no idea that they may not qualify for a Social Security spousal or survivor benefit. Educating the educators has begun to gain momentum during the process of offering 403(b) products, but we are only scratching the surface. 

We have also noticed that school business officials and TPAs have started to realize the delivery of unbiased generic retirement education is a priority, which is why the NTSA and Certified Retirement Education Specialist (CRES) program are doubling down on their efforts to make the CRES program an essential part of the learning process.

Though we have seen the level of education increase, we need to ask ourselves a question: Why are so many employees opting to participate in a traditional pre-tax 403(b) vs. a Roth 403(b) or 457 plan? Is it because it was easier than trying to explain the differences, or was it the correct recommendation? 

When we look beyond the 403(b) sale and begin to realize the importance of what we are capable of doing in educating individuals on their overall retirement strategy, we as a community of broker dealers, advisors and TPAs can effect positive change in the retirement shortfall that faces so many public school employees. Working together and making education the standard, can change the very nature of what we do and help individuals with their retirement goals. 

You have the choice to become part of the trend to educate and make a difference—or risk being left behind as this marketplace continues to evolve.

Paul Prete, CRES, AIF, is the Director of Advisor Relationships at PenServ Plan Services, Inc.

Opinions expressed are those of the author, and do not necessarily reflect the views of the NTSA or its members.