Perhaps it is not true that absolutely everyone owns a smartphone. But for defined contribution plan participants 35 and under, it is true.
And while 99 percent of those young plan participants share the trait of smartphone ownership, 89 percent of all plan participants are equally engaged in that mobile technology.
This connectivity of plan participants is one of the major takeaways from Spectrem’s newest DC Market Insights report Using Social Media and Mobile Technology in Financial Decisions. Smartphone usage is about as ubiquitous as it can be, and financial providers need to know how those smartphones are being used by investors who also happen to have defined contribution plans.
Keep in mind, among the defined contribution plan participants studied in the report, almost half are over the age of 50, and 32 percent are between the ages of 35 and 49. Yet these investors are almost as fully connected as their younger counterparts.
“Retirement plan providers and advisors must take advantage of mobile technology to develop long-term relationships with retirement plan participants,’’ said Spectrem President George H. Walper Jr. “For young participants, and even many older participants, the retirement plan is their biggest asset. By providing them with relevant, easy-to-use information, retirement plan providers have the perfect opportunity to build lifelong relationships.”
Like everyone else with a smartphone, plan participants use their mobile technology devices for a variety of purposes.
Keeping in mind smartphones are still telephones, obviously plan participants would use those devices to access their advisors regularly. But smartphones also allow for communication through texting, and 20 percent of plan participants want to be able to get through to their advisor, and get responses, via texting.
Younger plan participants and males are most interested in that form of communication with advisors. There are still regulations regarding what an advisor can offer in terms of information through that form of communication, however.
Smartphones also are used in place of personal computers and Macs, which means plan participants use the devices in the same way they would use their personal computers. For instance, 85 percent want to be able to check their financial accounts on the Internet, 42 percent obtain market updates in that fashion, and 35 percent research financial products and services.
In fact, plan participants sometimes prefer using their smartphone over their personal computer for financial research tasks. Seventeen percent would rather use their smartphone to access their financial account information, and 10 percent would prefer to use their smartphone to get advice from financial experts.
Plan participants use their smartphones frequently even when not using it for communication purposes. On average, the plan participants uses their smartphone more than 11 hours per week for tasks other than communication, and investors 35 years of age and younger use their smartphone more than 14 ½ hours a week for purposes a regular phone cannot perform.
Smartphone users have the choice between accessing Internet information on a website or employing an app designed for smartphone users. The division between those who prefer one to the other is small, with 37 percent preferring to use a web browser, 30 percent preferring the apps and 33 percent having no preference.
Therefore, an advisor or financial provider wanting to be accessible for their plan participant clients would want to develop a strong website and a functioning app to display the information they want their clients to have.
“Providers and advisors need to dedicate time, effort and budget to continually enhance and update their online presence,’’ Walper said. “Apps for smartphones and tablets must be used to supplement the plan website. Smartphone users love their aps, and providers can design an app to offer all sorts of information.”
Yet another communication vehicle available to plan participant clients is Internet videos. Eight percent of plan participants would rather gather their financial information via an informational video online than by talking to someone or reading an article. That includes 11 percent of plan participants between the ages of 35 and 49.
More than one-quarter of plan participants watch videos on financial websites, and much of that viewing takes place via a smartphone or tablet. Thirty-four percent of males watch informational videos on financial websites.
To see a free preview of the report, click here