Defined contribution plan participants are examining new ways to communicate with their 401(K) provider, including social media.
According to the Spectrem report Plan Participant Social Media and Mobile Technology Usage, DC plan participants are increasing their use of social media. Seventy-three percent use Facebook, 42 percent have LinkedIn accounts and 41 percent frequent YouTube. Twenty-one percent have Twitter accounts as well, and 11 percent more say they plan to increase their usage of Twitter.
Among younger 401(K) owners aged 35 and younger, Facebook usage is at 88 percent, with 54 percent using LinkedIn and YouTube.
Almost 20 percent of plan participants rely more on social media for communication than the telephone. Another 14 percent are gathering their information from social media more frequently than from traditional media.
Among younger plan participants, both of those numbers rise significantly. Forty-two percent of plan participants 35 years of age and younger rely more on social media than the telephone for communication. Thirty-three percent of younger plan participants rely on social media more than newspapers and television for information gathering.
How this relates to the 401(K) providers for plan participants is significant. Thirteen percent of participants say they would look closely at how much a future provider uses social media to communicate with customers and market their products when determining who to work with.
Eleven percent said they are more inclined to use a financial product they have seen advertised or discussed on some type of social media.
The Twitter information is also important, as 12 percent of plan participants said they would “follow” a trusted advisor through Twitter if the advisor was using the website. Eleven percent said they would be interested in a 401(K) advisor who used some type of social media to communicate with clients.
Asked to name one social media site they would use to get financial information, 41 percent said they would use Facebook, and 40 percent said they would use LinkedIn. Twitter (7 percent) just edged out YouTube (6 percent) as the No. 1 choice.
Social media is not yet a likely place for plan participants to find a new 401(K) advisor. Ten percent said they would use LinkedIn to find a new financial or investment advisor, and only 4 percent said they would use Facebook.
Six percent said they would use Facebook to communicate with a 401(K) advisor and another 6 percent said they would use LinkedIn.
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