Nearly 8 in 10 Young Investors Hungry to Learn More about Other Products and Services
DC plan providers have received a green light from 74% of plan participants to approach them directly or through their employers about other financial products and services. However, despite this receptivity to contact outside of the regular quarterly reporting cycle, engagement between DC plan providers and participants remains surprisingly weak. These and other findings are included in the annual DC Participant Planscape™, a Cogent Reports™ study by Market Strategies International.
According to the report, 8 in 10 younger investors (a combination of Millennials and Gen Xers) say they would welcome outreach by providers regarding other types of products and services offered by the company. What’s more, these investors prefer hearing directly from the provider as opposed to having information filtered through their employer. In addition to learning about company offerings, participants across all age groups also report a need for more information on general investing, portfolio rebalancing and general economic updates.
“Since the average plan participant maintains a relationship with 1.7 former plans, providers are sitting on a gold mine,” said Sonia Sharigian, senior product manager and report author. “Contact is typically limited to receiving quarterly statements or the occasional visit to a company’s website. However, our data suggest investors are not only open to but looking for more meaningful engagement with both current and former providers.”
The study explores interest among plan participants in a range of ancillary investment products, including rollover IRAs, one of the leading cross-sell opportunities for DC plan providers. According to Linda York, vice president of Cogent Reports, a key driver of consideration for new rollovers is the extent to which providers are perceived as being “easy to do business with.” “Examples of firms that we see scoring well on this attribute are Fidelity, Vanguard, USAA, Wells Fargo and American Funds,” said York.“Not surprisingly, these companies are also among the top 10 firms for rollover provider consideration.”
Top 10 Preferred Rollover Destinations
- Fidelity Investments
- American Funds
- Charles Schwab
- Wells Fargo
- Bank of America Merrill Lynch
- Merrill Lynch
- J.P. Morgan Chase
- Aon Hewitt
About DC Participant Planscape™
Cogent Reports conducted an online survey of a representative cross section of 4,638 plan participants in July 2015. Survey participants are required to be actively contributing to a DC plan and/or have at least $5,000 in a former employer’s DC plan. In determining the sampling frame for this study, Cogent Reports relies upon US census data to design a sampling frame that mirrors the engaged participant universe by gender, region, age, education and household income. Strict quotas are set during the data collection period, and post-fielding statistical weighting (where necessary) is applied. The data have a margin of error of ±1.44% at the 95% confidence level. Market Strategies will supply the exact wording of any survey questions upon request.
Read our blog, DC Plan Providers Leave Participants Wanting More, for additional info on how providers can leverage cross-sell opportunities to increase DC dollars.