Friday, October 19, 2012

US co Principal sets up arm ahead of pension reforms

Principal Financial, a US pension group, has set up a wholly-owned subsidiary ahead of the opening of the pension sector in India. The subsidiary company will train independent advisers to provide retirement savings advice.

"The Indian middle class is expected to treble to 500 million by 2025, and people will realize that government pension programmes will not be enough for retirement and they will have to take personal responsibility for saving for retirement age. We see huge opportunity in retirement savings," said Ned Burmeister, senior vice-president & COO, Principal International Inc.

The new company - Principal Retirement Advisors - is headquartered in Mumbai and has offices in Delhi, Bangalore, Pune and Hyderabad with immediate plans to expand to six more cities. It will be led by Sudipto Roy, former business head of Principal Mutual Fund. The advisers would work for a fee and would not accept any commission from any financial service provider.

Principal has evinced interest in the pension segment ever since the IRDA Act was passed more than a decade ago.

The $367.1-billion company has steadfastly focused on the pension segment and has a mutual fund company Principal PNB Asset Management.

He added that mandatory programmes do not provide more than one third income replacement after retirement. "Principal Retirement Advisors will have a network of advisers heavily trained and certified who will meet customers and help them find their goals and then with an emphasis on retirement and other lifestage goals, come up with an investment plan to achieve the goals," said Burmeister. He added that the advisers would use Principal's proprietary software to come up with the right asset allocation over the years.

Source: http://timesofindia.indiatimes.com/business/india-business/US-co-Principal-sets-up-arm-ahead-of-pension-reforms/articleshow/16844813.cms

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