Defined contribution plan participants use social media and mobile technology to keep a watchful eye on their accounts as well as their other investments.
Financial providers need to consider the way participants access plan information to ensure they are a resource should they want further information on their non-retirement plan assets.
“There is no way to overstate the use of cellphones, smartphones and tablets to access information, and it would be nearly as impossible to overestimate the value of social media to plan participants,’’ said Spectrem president George H. Walper Jr. “Plan participants use these new technologies to access their accounts the same way affluent investors do for their portfolios. Providers need to make sure they are making themselves available to participants through apps and updated websites.”
Spectrem’s latest defined contribution participant insights series study Using Social Media and Mobile Technology in Financial Decisions displays the extent to which participants use smartphones and tablets for financial purposes. It also looks at social media usage to determine which participants are visiting which sites for which financial inquiries.
The report shows the obvious popularity of social media sites among younger plan participants, but notes that almost 70 percent of Baby Boomers visit Facebook and 40 percent are on LinkedIn. In terms of mobile technology, smartphone usage is almost universal, and tablets are used by almost 70 percent of participants, including a high percentage of those Baby Boomer participants, arguing against the belief that technology has passed them by.
What does this mean for providers? It means retirement plan information, as well as any investment or financial information participants could use to make financial decisions, must be available on the provider website, with similar information available via apps.
At the same time, providers must make sure their social media pages are regularly updated. Participants may not operate on the same schedule as the stock market; their need for information can occur at any time of the day, and information must be there for them to access.
DC plan participants clearly have retirement on their minds; they would not have defined contribution plans otherwise. They want to get as much information as they can about retirement planning, and they want to be able to get that information via their smartphone or tablet.
The Spectrem study asked plan participants to rate on a 0-to-100 scale their interest in retirement related programs they can access via smartphone or tablet. They gave a rating of 60.04, well above the median rating, for a retirement planning tool that would indicate asset allocation for a greater return, and gave a rating of 57.83 for a tool to help allocate retirement assists and social security income to provide the greatest possible retirement funds possible.
The fact is that defined contribution plan participants are not done with their retirement planning the minute they set up their 401(k) or Roth IRA. Just like other investors, defined contribution plan participants can be active in making decisions regarding the financial status of their retirement. Providers must provide the information those plan participants want on their social media sites and company websites, and much have information available via apps for those investors who prefer that form of information retrieval.
Top Takeaways for Advisors
Keep defined contribution plan participants in mind when you make decisions regarding your website, your social media presence and your response to emerging technologies. They may be looking to retirement, but these participants are not done making plans for the future. Providers want to be a source of information for those investors.
Retirement planning information might seem like standard fare for the articles or blogs providers post on their website, but that information must include any impact new information would have on defined contribution plans.
One-quarter of plan participants have already used texting as a way to communicate with their provider or advisor, and interest in that communication opportunity was rated above 40 on a 0-to-100 scale among participants of all ages, and highest among World War Ii era investors.