The Principal Financial Group Business Priorities. Presented to. Presented by. Friday, September 21, 2012

Transcription

1 The Principal Financial Group Business Priorities Presented to John Smith Presented by Jane Doe Friday, September 21, 2012 WE'LL GIVE YOU AN EDGE

2 Introduction For most business owners, it's a challenge to balance the financial needs of the business with their personal financial wellbeing. Therefore, it's important to check your priorities on a recurring basis. Many times it s also helpful to see, overall, how you compare with your peers. The table below provides a 'snap shot' of how your priorities, today, compare with those of peer companies, based on employee size. Your priorities Your Rank Business Priority Peer Rank 1 Health and Wellness Solutions 4 2 Non-Medical Benefits 6 3 Voluntary Benefits 8 4 Qualified Retirement Plans 5 5 Supplemental Key Employee Benefits 7 6 Business Protection 3 7 Exit Planning 10 8 Wealth Transfer 9 9 Income Protection 2 10 Survivor Income 1 Reviewing your priorities On the following pages, we have prepared an in-depth look at your rankings for each area of priority based on the information you provided in the survey. We have also included your ranking compared with those of your peer companies based on employee size. The peer results are from a survey among qualifying employers, which asked them to identify their most prevalent area of need from benefit plans and personal financial well-being. Refer to Research Methodology at the end of this report for more information about the peer survey respondents. Once you have reviewed your priorities, we will focus on creating a strategy to address your top priorities.

3 Priority #1: Health and Wellness Solutions Health and Wellness Solutions are health plans offered to a group of individuals by an employer, association, union, or other entity. Health and Wellness Solutions is ranked as a Medium priority for you because: You currently offer some type of health and wellness solutions. You are not interested in implementing, changing or adding employee benefits in the next 12 months. Health and Wellness Solutions is ranked as a Medium priority for your peers. Peer feedback: Of the peer companies we surveyed, 42% indicated health and wellness solutions was a high priority for them, and 39% indicated they would be implementing, changing or adding employee benefits in the next 12 months.

4 Priority #2: Non-Medical Benefits Non-Medical Benefits are employer-sponsored benefits that provide life, disability, dental, and vision insurance and are generally offered to all employees and their dependents. Non-Medical Benefits is ranked as a Medium priority for you because: You currently offer some non-medical benefits for you and your employees. You are not interested in implementing, changing or adding employee benefits in the next 12 months. Non-Medical Benefits is ranked as a Medium priority for your peers. Peer feedback: Of the peer companies we surveyed, 18% indicated non-medical benefits was a high priority for them, and 39% indicated they would be implementing, changing or adding any employee benefits in the next 12 months.

5 Priority #3: Voluntary Benefits Voluntary Benefits are employer-sponsored benefits, usually paid for by employees. Many of these benefits are administered through payroll deduction. Voluntary Benefits is ranked as a Medium priority for you because: You currently offer some voluntary benefits. You are not interested in implementing, changing or adding employee benefits in the next 12 months. Voluntary Benefits is ranked as a Low priority for your peers. Peer feedback: Of the peer companies we surveyed, 8% indicated offering voluntary benefits was a high priority for them, and 39% indicated they would be implementing, changing or adding any employee benefits in the next 12 months.

6 Priority #4: Qualified Retirement Benefits Qualified Retirement Plans are retirement-focused benefits and are generally made available to all eligible employees. Qualified Retirement Plans is ranked as a Medium priority for you because: You currently offer a qualified retirement plan solution for you and your employees. You and your key employees are limited in the amount you are allowed to contribute to your qualified retirement plan. You may want to consider a review of your existing plan, and the opportunities available through supplemental key employee benefits. You are satisfied with the services, features, options, and performance of your qualified retirement plan. You are not interested in implementing, changing or adding one or more employee benefits in the next 12 months. Qualified Retirement Plans is ranked as a Medium priority for your peers. Peer feedback: Of the peer companies we surveyed, 26% indicated offering qualified retirement plans was a high priority for them, and 39% indicated they would be implementing, changing or adding any employee benefits in the next 12 months.

7 Priority #5: Supplemental Key Employee Benefits Supplemental Key Employee Benefits are generally offered only to business owners and key employees whose performance most affects the success of the business. Supplemental Key Employee Benefits are ranked as a Low priority for you because: You currently have supplemental key employee benefits for you and your key employees. Your current supplemental key employee benefits have been reviewed within the last two years. You are not interested in implementing, changing or adding business owner and executive solutions in the next 12 months. Supplemental key employee benefits is ranked as a Medium priority for your peers. Peer feedback: Of the peer companies we surveyed, 5% indicated offering supplemental key employee benefits was a high priority for them, and 19% indicated they would be implementing, changing or adding business owner or executive solutions in the next 12 months.

8 Priority #6: Business Protection Business Protection are plans established to protect the integrity, cash flow and value of the business from the loss of a key employee due to death, disability or termination of employment. Business Protection is ranked as a Medium priority for you because: You currently have at least one business protection plan to protect your business in the event of a death or disability. Your current business protection plans have not been reviewed within the last two years. It s recommended these plans be reviewed every couple of years to ensure they continue to meet your business ever-changing needs. You are not interested in implementing, changing or adding one or more business owner and executive solutions in the next 12 months. Your business does not have significant debt. Less than a quarter of your business debt is covered by life insurance. You may want to consider increasing the amount of business debt that is protected in the event of an unexpected death of a business owner. Business Protection is ranked as a High priority for your peers. Peer feedback: Of the peer companies we surveyed, 33% indicated implementing business protection plans was a high priority for them, and 19% indicated they would be implementing, changing or adding business owner or executive solutions in the next 12 months.

9 Priority #7: Exit Planning Exit Planning includes formal agreements established by and between business owners, family members, key employees, or other third parties to help provide for the continuation or sale of the business. Exit Planning is ranked as a Medium priority for you because: You intend to grow your business. You have a written plan in place to implement your exit strategy in the event of your death. You do not currently have funding in place which allows a funded exit from your business in the event of an owner s death. You do not currently have funding in place which allows a funded exit from your business in the event of an owner s disability. You do not currently have funding in place to meet your exit strategy needs. Funding the plan is important to allow you to exit your business on your own terms. You are not currently interested in implementing, changing or adding one or more business owner and executive solutions. Exit Planning is ranked as a Low priority for your peers. Peer feedback: Of the peer companies we surveyed, 2% indicated implementing an effective exit plan was a high priority for them, and 19% indicated they would be implementing, changing or adding any business owner and executive solutions in the next 12 months.

10 Priority #8: Wealth Transfer Wealth Transfer is the preparation of plans and/or agreements to ensure that all assets personal and business are used to meet business owners lifetime objectives. Wealth Transfer is ranked as a Medium priority for you because: You have a wealth transfer plan to distribute your personal and business assets in the event of your death. You have indicated you have plans to distribute your wealth, but the plans are only partially funded. This is a good time to review the funding level of these plans. Your wealth transfer plans (trusts and wills) have not been reviewed within the last two years and may need attention to ensure your wealth transfer strategy reflects your goals. You are not interested in implementing, changing or adding to your financial security strategy in the next 12 months. Wealth Transfer is ranked as a Low priority for your peers. Peer feedback: Of the peer companies we surveyed, 13% indicated implementing an effective wealth transfer strategy was a high priority for them, and 27% indicated they would be implementing, changing or adding to their financial security strategy in the next 12 months.

11 Priority #9: Income Protection Income Protection is designed to establish a plan to protect you and your family in the event of a prolonged illness or injury. Income Protection is ranked as a Medium priority for you because: You currently have individual disability income insurance for yourself to protect your family in the event you experience a prolonged illness or injury. You currently have individual disability income insurance but have not recently reviewed your policy. Since your income and needs can change, it's important to review your policy periodically in order to keep it current. You are not interested in implementing, changing or adding to your financial security strategy in the next 12 months. Income Protection is ranked as a High priority for your peers. Peer feedback: Of the peer companies we surveyed, 44% indicated implementing an effective income protection strategy was a high priority for them, and 27% indicated they would be implementing, changing or adding to their financial security strategy in the next 12 months.

12 Priority #10: Survivor Income Survivor Income includes individual life insurance which enables you to feel comfortable that your family/heirs will be able to maintain their standard of living after your death. Survivor Income is ranked as a Medium priority for you because: You have individual life insurance to protect your family in the event of your death. You are not currently using business assets/cash flow to finance your personal life insurance needs. Your personal life insurance needs have been reviewed within the last two years. You are not interested in implementing, changing or adding to your financial security strategy in the next 12 months. Survivor Income is ranked as a High priority for your peers. Peer feedback: Of the peer companies we surveyed, 11% indicated implementing an effective survivor income strategy was a high priority for them, and 27% indicated they would be implementing, changing or adding to their financial security strategy in the next 12 months.

13 Research methodology for peer ranking A survey was conducted by Harris Interactive with 505 completed interviews from May 4, 2012 through May 21, Interviews were conducted online using the Harris Poll panel. Respondents qualified for this survey if they were: U.S. residents, age 21 and older Currently employed, either full-time, part-time or self-employed A business owner of at least 5 percent of their business Actively managing their business An employer with between 2 and 500 employees: Business Owners with 2-9 employees (101 respondents) Business Owners with employees (103 respondents) Business Owners with employees (101 respondents) Business Owners with employees (100 respondents) Business Owners with employees (100 respondents)

14 Next steps Congratulations! You have successfully identified your key financial priorities and are now ready to put action plans in place to address the financial challenges that keep you up at night. Please let me know of any questions or concerns you may have. I look forward to helping you fine-tune a strategy as you move toward accomplishing all of your personal and business financial goals. STEP 1 2 ACTION Identify specific solutions, available to address your top priorities, by completing a priority-specific questionnaire. Schedule a follow-up meeting to review potential solutions to meet your financial priorities. 3 Implement any or all solutions that best address your needs. 4 Revisit your priorities regularly and adjust your plans, if needed, to ensure they continue to meet your objectives. WE LL GIVE YOU AN EDGE Principal National Life Insurance Company and Principal Life Insurance Company, Des Moines, Iowa , While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax or accounting obligations and requirements. Insurance products from the Principal Financial Group (The Principal ) are issued by Principal National Life Insurance Company (except in New York) and Principal Life Insurance Company, Des Moines, Iowa /2012 #t uu