Defined contribution plan participants use mobile technology to keep a watchful eye on their accounts as well as their other investments. They also want to be able to contact their advisor via mobile technology if the advisor will allow it.
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 study Using Social Media and Mobile Technology in Financial Decisions displays the extent to which participants use smartphones and tablets for financial purposes.
Smartphone usage is almost universal (90 percent of participants say they use one), and tablets are used by almost 60 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.
Besides information gathering, smartphones have one use which almost all users employ: texting. And plan participants really want to be able to text their advisor if possible. According to the study, 16 percent of participants have already texted their advisor, and when asked to place their interest in having texting as a possible form of communication with their advisor, plan participants place their interest at 40.71, high enough to indicate that advisors should consider that possibility.
DC plan participants clearly have retirement on their minds; they would not contribute to their 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 53.12, well above the median rating, for a retirement planning tool that would indicate asset allocation for a greater return, and gave a rating of 50.43 for a tool to help allocate retirement assets and social security income to provide the greatest possible retirement income.
The fact is that defined contribution plan participants are not done with their retirement planning the minute they begin contributing to their 401(k) plan. 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 must have information available via apps for those investors who prefer that form of information retrieval.
Top Takeaways For Providers
Keep defined contribution plan participant preferences in mind when you make decisions regarding your website, your social media presence and your response to emerging technologies. Providers need 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 an explanation of how participants can effectively use these tools to make decisions about their retirement plans.
©2017 Spectrem Group