Need Engagement Ideas? Try Broker Sites

Engaging plan participants so they can improve their retirement readiness challenges retirement plan providers. If plan advisers and sponsors are struggling to educate and create a dialogue with participants about retirement planning, strategies used elsewhere in financial services could yield some fresh ideas.

Brokerage firms, for example, have successfully leveraged advances in technology to engage and motivate clients. Three areas—educational support, social media and alerts—could serve as models for plan providers.

Retirement plan and brokerage clients deal with many of the same topics and issues: anticipating retirement expenses and developing an adequately funded retirement account. Plan providers, however, generally tend to provide less educational support. Brokerage sites offer investors a range of educational resources in a variety of formats, including videos, tutorials, quizzes and commentaries.

These resources offer guidance on investing concepts and help users understand how best to utilize the site. Fidelity’s brokerage site, for instance, offers an impressive collection of educational articles on a range of topics, such as “What to do with an Old 401(k)?” and “Maximizing Deferred Compensation.” Providers can improve clients’ comfort and, thus, engagement by looking to brokerage sites for ideas on offering more retirement-themed resources.

Social media and online communities could be instrumental in increasing engagement. Over half the country has a Facebook profile, and there are more than 100 million active Twitter accounts. Yet the popular social networks host a surprisingly limited number of retirement-specific social media pages.

Of the 17 providers Corporate Insight tracks, just four offer a social media page devoted entirely to retirement. In contrast, Corporate Insight tracks 16 brokerage firms—and 15 of these maintain Facebook pages or Twitter feeds, often publicized by icons on their sites.

Join the Conversation

Brokerages have also embraced proprietary online communities. E*TRADE, optionsXpress, Scottrade, TD Ameritrade and TradeKing all maintain their own networks, open to clients and, in some cases, outside investors interested in joining the conversation. Social media, whether through an outside network or in an exclusive community, is an opportunity for providers to engage participants and help them find information and support.

Account-related alerts are an innovative way to keep participants informed and engaged with their retirement plan. Most brokerage sites allow investors to set alerts on a variety of issues, ranging from account or position changes to market news and research. A multitude of delivery options  allow updates to be sent to mobile phones, multiple email addresses or to a site message center.

In contrast, retirement plan providers generally offer only alerts to confirm a transaction, remind participants of the availability of a statement or provide updated investment information such as prospectuses. In the brokerage space, ShareBuilder uses alerts to prompt clients to implement an online financial plan the firm created for them.

Retirement plan sponsors and providers might want to consider alerts that remind participants to revisit a retirement plan at specific intervals, or notify them of a change in value to a fund of interest. Providers could also proactively send an alert to participants who have not checked balances or changed their asset allocation within a certain time frame.

Engaging participants to become more proactive in their retirement planning requires a synchronized combination of outreach solutions, educational resources and technology. Also remember that plan participants’ expectations are shaped by their online experiences outside their retirement accounts.

They buy goods and services online, they bank online, and they even hang out online. And if that weren’t challenging enough, the online world is quickly moving to the mobile screen. If plan providers wish to engage more with their participants, they need to provide an environment in which the participants are comfortable. They would be well served to watch innovations in these areas for even more ideas to better connect with plan participants.

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Michael Ellison is president of Corporate Insight Inc., a New York research firm for financial services (on Twitter as @cinsight). He can be reached through Twitter@mikeellison. Drew Maresca contributed to this article.