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In their effort to develop effective participant communication strategies, plan providers need to serve multiple audiences. Participant education needs can vary by generation, investment knowledge, wealth or income level, marital status and even gender. Yet one facet many participant communication professionals don’t consider is intent—whether the individual participant is planning to make a change to his or her retirement plan account. Depending on their level of intent, participants will either require more specific information to inform their upcoming decision, or content that validates their current retirement saving strategies or motivates necessary changes.
Who Are “Ready-to-act” Participants?
Ready-to-act (RTA) Participants are those who are planning to make a change to their current employer-sponsored retirement plan in the near future. And they are few and far between. Our most recent DC Participant Planscape™ survey found that only one in six participants intends to make a change to his or her plan investments and even fewer (13%) are likely to increase their contribution amount in the near future. RTA Participants are more likely to be male, younger (Millennial or Gen X) and use advice to manage their investment portfolios. In fact, half of RTA Participants planning to make an investment change are working with a financial advisor. Conversely, Not Ready-to-act Participants, those who do not anticipate making changes to their retirement plan accounts, are much more likely to be self-directed, managing their investments without any professional assistance.
Communicating to Ready-to-act Participants
RTA Participants are hungry for information and highly engaged in seeking the knowledge they need to make educated decisions about their retirement plan accounts. For plan providers looking to position themselves as trusted knowledge sources, it’s important to recognize the external sources of information RTA Participants are already using in order to complement rather than duplicate content in communication programs. In addition to the advice RTA Participants receive from their financial advisor, half look to social media for retirement education. In fact, nearly one-third (31%) of RTA Participants intending to make an investment change use social media daily as part of their retirement decision-making process.
Compared with participants staying the course, RTA Participants are more confident with their current finances and ability to save appropriately for retirement. So where do they need the most help from providers? Our syndicated research found that a large unexpected expense, paying down debt and subsequent anxiety over financial security all cause more concern for RTA Participants compared with participants who are not ready to act. RTA Participants don’t need to be convinced to adjust their investment allocations or increase their contribution levels. Instead, they seek assurance that they can balance the demands of saving for retirement in conjunction with managing their current financial situations. Plan providers who can recognize the unique needs of RTA Participants and adjust communication strategies accordingly have the opportunity to foster deep, trusted relationships with these younger, advised participants.