As small business owners, often at the forefront of economic pressures, face inevitable hurdles in staying afloat, employee benefit hurdles are part of the challenge.
According to recent research released by retirement, employee benefits and investment management company Voya Financial Inc., small businesses increasingly confront challenges such as retention, succession planning, fiduciary oversight, administrative efficiency, tax-efficient benefit solutions and managing long-term financial obligations.
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Entrepreneurs are turning to plan advisers for support.
“Owners are grappling with talent shortages, AI job displacement for entry level roles, medical cost inflation, succession decisions, fiduciary responsibilities, cybersecurity concerns and growth strategies,” wrote Amy Vaillancourt, Voya’s president of retirement , in an email to PLANADVISER. “Our research suggests there is considerable demand for advisers to play a broader and more strategic role.”
According to Voya’s Customer Insights & Research Survey, 92% of responding small business owners said their adviser should be able to help with employee retention, and 91% found advisers more valuable when they could offer guidance on executive compensation. More than two-thirds of respondents (69%) wanted advisers who could assist with tax-efficient ownership transitions.
Among the 201 business owners surveyed, 116 were currently working with a retirement plan adviser and 84 were not.
“Small business owners are equally prioritizing retirement and long-term business planning,” Vaillancourt wrote. “They want and need advisers who can see the full picture.”
Voya’s summary also mentioned that advisers could address small business owners and employees’ needs with employee stock ownership plans, nonqualified deferred compensation plans and corporate-owned life insurance.
The most important thing an adviser could do, according to Vaillancourt, is understand business owners’ broader goals and desired benefit strategies.
“Whether it’s improving retention, planning for ownership transition, addressing executive compensation needs, managing healthcare costs or reducing administrative complexity, the adviser’s role is increasingly about integrating people strategy, financial strategy and business strategy,” she wrote.
On behalf of Voya, from May 5 to 12, Morning Consult surveyed 201 small business owners in the U.S. who offered a retirement plan.
