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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