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Betty Meredith, CFA, CFP®, CRC®, Director of Education, and Research, InFRE

Betty Meredith, CFA, CFP®, CRC®, Director of Education, and Research, InFRE


By Betty Meredith, InFRE’s Director of Education and Research

In 2011, the retirement industry again reached a total asset size of over $17 trillion dollars (pre-2008 levels). With boomers retiring at a rate of 10,000 a day, there is an urgent need to increase the quality of advice and retirement security of the American worker.

InFRE chose the personal financial planning program at Texas Tech and Dr. John Salter, CFP®, AIFA®, as our university partner to help us identify retirement-specific career paths and the skills and knowledge needed to perform these jobs that are so important to the retirement security of American workers.

The goal of this project was to identify the knowledge and skills employers desire in entry-level applicants to help clarify and facilitate a new pathway to education and careers in the retirement industry for students of financial planning and business undergrad and grad programs, and individuals considering changing careers.

With the help of TTU, we surveyed retirement industry professionals during 2009-2010 to determine the knowledge and skills desired by employers of over 25 entry-level, intermediate and advanced positions within the industry. Respondents were asked to answer 31 questions about the various knowledge and skills candidates for this position would need to demonstrate. The survey was sent to the International  Foundation for Retirement Education (InFRE) Certified Retirement Counselor® (CRC®) Certificants and National Association of Government Defined Contribution Administrators (NAGDCA) members seeking their assistance in identifying the skills and knowledge needed in their respective fields.

The result of this research is the new InFRE® Retirement Career Guide, complete with model college and university curriculum, designed to introduce the retirement career path to college students as a possible and rewarding career, as well as to help universities educate students in a way that the initial on-the-job training that would normally occur to increase the hire-ability of their students. The retirement industry career guide will be updated regularly, allowing prospective employers to place ads and job postings to attract highly qualified financial planning program graduates.

The career guide is available in both print and electronic formats. If you’d like a supply of print versions to handout at career fairs or to groups of university students, please contact us and allow 2-4 weeks for delivery. Eventually we will post available retirement industry positions, so keep us in mind if you need help getting the word out.

And if you happen to be a retirement professional who knows college students or adults considering a career change, please send them a link to the guide. We’ve been told it is an excellent resource!

The following excerpts from the Guide below are for readers seeking more information.

Types of Retirement Accounts
Americans have many different tax-advantaged ways to save for retirement. Some
of the most common products include 401(k)s, 403(b)s, annuities, pensions, and
other investments like real estate. Broadly speaking there are two different types of retirement plans: defined benefit plans and defined contribution plans. Most Americans today participate in some form of defined contribution plan. Defined contribution plans can take many different forms including:  401(k), 403(b), 457, simplified employee pension (SEP), savings incentive match plans for employees (SIMPLE), employee stock ownership plans (ESOP), profit sharing, stock bonus and savings or thrift plans.

The primary difference between defined benefit and defined contribution plans is who bears the investment risk. With a defined benefit plan, the employer promises to pay a specified amount to the employee during retirement, and thus the  employer bears the risk of managing the employees’ retirement funds. Under a defined contribution plan, the employer’s responsibility ends once the promised contribution has been made into the employee’s account; the employee is then responsible for selecting appropriate investments.

Different Types of Retirement Jobs
While there are no specific prescribed paths to the various retirement industry jobs, in the InFRE® Retirement Career Guide we attempt to provide some of the more common progression and advancement opportunities. Please note that experience in any one area may prepare a candidate for opportunities in other areas. For example, experience in retirement benefits administration could prepare you for a career in financial planning, but it may not be the most common route that most people interested in that career would follow. In addition, please note that many different job titles exist in the retirement industry, and it would be impossible to list them all.

In the Guide we have also tried to capture the essence of the job responsibilities with each job title, but it should not be considered an exhaustive listing. Entry level positions can be obtained directly out of college or upon completion of a company training program; intermediate level careers generally require 5 or more years of experience, and advanced level careers can require 10 years of experience or more to achieve.

Entry-level jobs in the retirement industry are varied. Jobs range from very technical and specialized to a more generalized knowledge of products and services. Some of the most popular jobs in the industry include: financial planners, retirement counselors, employee benefits specialists, insurance product sales, brokerage product sales, retirement plan administration and compliance, investment management, actuaries, and call center support. Most jobs require a bachelor’s degree and many require some additional certification or licensing. Excellent communication and interpersonal skills in addition to math and analytical ability are important attributes to have for success in the industry. See Appendix A for sample job postings and duties from several companies in the retirement industry.

The retirement industry can be subdivided into two groups: retail market and employer market. The retail market provides products and sells services to individuals. For example, a financial planner that has several different individual families as clients serves the retail market. The employer market focuses on  corporations and governmental agencies. For example, a company that handles all the investment transactions and record keeping for a governmental agency or a corporation would be part of the employer market.

In the retail retirement market jobs can be found with banks, brokerage firms, insurance companies, tax firms, mutual funds, and financial planning firms. Most of the retail market jobs include selling products, services or advice to retail clients. Age and experience can be a factor in this field. Many older households may not feel comfortable with a young and seemingly inexperienced person investing their money for them. In addition, there can be a lot of inertia with financial decisions; it may take a lot of effort to get someone to make an initial financial decision, but once made it is not likely to change easily. This can be both good and bad news to young retirement professionals. It may be difficult to attract new clients initially, but once you have a client they may stay with you for a long time. Therefore, compensation during the first few years in the retail market can be generally low, but then can rise very quickly once you have established a large enough client base.

The employer market can be further subdivided into institutional service providers and employer-sponsored plans. Basically when a company decides to offer a retirement savings plan of any type to its employees, they have two choices: they can do all the work themselves, or hire someone to do the work for them. The “work” involved with a retirement plan includes activities like setting up new accounts, determining investment selection options, investing the assets, sending out statements, educating employees about the plan and answering employee questions. Some types of retirement plans (e.g. 401(k)) require that the money be given to an independent third party (e.g. brokerage firm) once contributions have been made.

Institutional service providers are companies that help employers with the creation, recordkeeping, investment, custody, and transactions of retirement plans and assets, as well as enrolling employees in the plan. Jobs in the institutional service provider segment can be broken down into four main areas: 1) retirement plan sales and support, 2) retirement plan administrators, 3) investment management and 4) retirement investment product sales and support.

Some companies or governmental agencies are large enough or complicated enough to handle the retirement plan work themselves. Jobs in this employer-sponsored plan segment can be broken down into two main areas: 1) retirement benefits administration, and 2) retirement counseling.

A brief description of each of the career categories follows, starting with the retail market.

Retail Market Job Descriptions
Financial planners work in the retail market helping individual clients to calculate retirement needs, develop investment plans, develop insurance recommendations to manage risk, minimize taxes, review estate planning documents, and help establish and accomplish financial goals. Some financial planners focus on the asset accumulation and investment decisions and do not provide comprehensive financial planning services. Many financial planners work with a fairly small number of high net worth clients and help them develop financial goals, and then planners monitor client investments to ensure the plan is meeting client needs. Follow-up meetings with clients occur at least annually to help the planner and client review performance and to update the plan for life events or changes in their goals. These positions require strong interpersonal skills and involve the selling of financial services and products. Financial planners are subject to state and federal regulation and thus require licenses and certifications. Some travel is generally required, and many planners meet and communicate with clients outside of normal business hours.

Unfortunately there is no consistency in the terminology used to describe the type of work performed in the retail financial advice and sales market. Anyone can call themselves a “financial planner,” but ideally that title should be reserved to someone who holds a financial planning designation like the CFP® and falls under a fiduciary standard. Other job titles in this market segment include but are not limited to: financial advisor, broker, personal banker, wealth manager, investment advisor, retirement planner, life planner, and financial coach to name a few.

The types of products and services and job responsibilities vary greatly from job title to job title and firm to firm, but generally include a mixture of the responsibilities mentioned above. Often the compensation structure varies as well. There are five main forms of compensation in this market segment: salary, commission, percentage of assets under management, fees and bonuses. In addition, many jobs offer a combination of compensation, such as a salary plus a bonus if certain goals are met. In the retail market, the majority of compensation plans are contingent upon sales or assets under management.

Institutional Service Provider Job Descriptions
Retirement plan sales support is a combination of retirement counseling and investment product sales. Job duties often include answering employee questions about benefits and providing customized guidance about retirement savings adequacy, etc. A major goal is to increase retirement plan participation and contribution rates through increased understanding of the plan benefits available. The position is often utilized as a precursor to investment plan sales and may include responsibility for some smaller clients. Selling skills are generally required for these positions, and good communication and presentation skills are essential. Significant travel is required. The most popular certification in this area is the CRC®.

Retirement plan administrators handle the record-keeping requirements of member accounts as well as processing member requests for investment changes and distributions. Similar to employer-sponsored plan retirement benefits administration (described later), administrators from a larger company (that may have existing economies of scale and where the administrator has experience with the rules and regulations associated with retirement plan administration) are often hired away by smaller employers. Administrators in larger retirement firms usually handle the retirement plans for many different companies, and they can serve in call centers to answer member questions or concerns and provide websites to handle enrollment, investment selection, distribution requests, etc. In addition, they generally prepare annual plan reports and testing for governmental agencies. High attention to detail is needed as these positions often process a large volume of requests. Selling skills are generally not required for these positions, but good  communication skills are essential.

Retirement investment managers deal with the investment of retirement funds in various types of asset classes. In some cases, retirement plan assets are large enough that it makes sense for a separate group of people with a more specialized skill set of investment selection and monitoring to be utilized to oversee the management of plan assets. Primarily serving the employer-based market, this position seeks to manage fund investments based on guidelines given by the retirement plan’s investment policy statement. A career in this area would generally start with individual company analysis to determine if that particular company has good growth prospects, and then making a determination if that company’s stock is under- or over-valued in the marketplace. After an analyst has experience with individual company analysis, they are usually given an industry to analyze. These positions often work with complex mathematical models and require a good understanding of accounting principles and financial statement analysis. The most popular certification in this area is the Chartered Financial Analyst (CFA).

Retirement investment product sales people tend to work for mutual fund companies or insurance companies. Their goal is to get people who manage money (such as retail financial planners) to use their company’s products, such as mutual funds and annuities. Once a business relationship is established, they work to retain business by making sure plan participants are happy with the products and services they provide. Investment product sales people tend to work with financial planners or financial advisors who sell retirement plans and record-keeping services to small and mid-sized companies. They promote their products through office visits, training seminars, and joint sales calls. They must have significant experience with sophisticated investment products and strategies and be willing to travel extensively. Generally these positions require some combination of series 6, 7, 63, 65 and 66 licenses, which are securities licenses. Some sample job titles would include external wholesaler and regional pension consultant.

Employer-Sponsored Plan Job Descriptions

Retirement benefits administration primarily operates in the employer market and handles the record keeping and day-to-day questions of the members. Frequently these positions can be found in an employer’s human resource department and can include additional responsibilities outside that of the retirement industry (like vacation policies, healthcare benefits, etc.). The job duties often include new hire enrollment, open enrollment period change processing, education of employees on the plan benefits, answering employee questions about benefits, etc. These positions are often found in the public and private sector where large numbers of employees are concentrated or where company plan benefits are complex and varied. High attention to detail is needed as these positions often process a large volume of requests. Selling skills are generally not required for these positions, but good communication skills are essential.

A retirement counselor is someone who answers questions about how to prepare for retirement. A retirement counselor often works with individuals to provide customized advice about retirement savings adequacy and investment selection. Typically the job focus is to provide education and assistance to employers and plan participants. Their goal is to increase retirement plan participation and contribution rates through an increased understanding of the benefits available to employees and stressing the importance of planning for the future. The ability to work independently and to have strong organizational skills is needed. Some travel is generally required as these positions conduct training and informational sessions at various employers’ sites. The most popular certification in this area is the Certified Retirement Counselor® (CRC®).