Financial literacy in the 21st century should be an inalienable right, according to Whitlow, CEO and founder of edu(k)ate. “Without it, you are at a disadvantage,” he says. “Thousands of retirement plan consultants and financial advisers are in the position to tackle this problem.”

The online startup, based in Orlando, Florida, says it can boost plan participants’ financial literacy using a combination of game-like techniques and motivations, such as prizes and sponsored contests, and by drawing on the work of behavioral finance. In short, motivational techniques boost financial wellness activity.

Gameification has gained a definite foothold over the past five or six years, Whitlow tells PLANADVISER, so creating edu(k)ate as an app to distribute financial literacy to participants using gameified techniques is viable. Users are awarded badges and points, and can participate in contests. “We can create an experience that resembles what you’d have inside a game,” says Whitlow, whose past experience includes 12 years as an institutional plan consultant.

The approach is effective, Whitlow says. The firm has seen a dramatic increase in the willingness of employees to complete financial learning. “We’ve seen more than 40% of a population go to the site, log in, think about retirement,” he says. “Once we’ve captured that email address, we have the opportunity to re-engage those folks, so we can reach out again and connect.”

Site visitors receive reminders about education units they can still complete or new courses they should think about taking. “We can use communication in a way that HR or the consultant doesn’t have time to do,” Whitlow says. 

Measuring Progress

Live in-person meetings can be expensive and time-consuming, Whitlow feels. They mostly measure employee attendance at the meeting but fail to actually engage participants or measure what they have learned. The edu(k)ate dashboard tools manage plan education, connect participants to education and measure the results of employee engagement by reports that track and communicate results.

Financial advisers with more than one plan must learn multiple processes effectively in order to distribute education and communication, Whitlow points out, since each company has a different set of tools and a different program. It can also be slightly tough for an adviser not to cross-pollinate. “If I like a course at one company,” he says, “how much of a faux pas would it be to show that course to another? So edu(k)ate tears down barriers. Here’s a way to do education the same for everyone.” The platform is agnostic, and the firm can create a designated channel on the site for a recordkeeper or vendor to put on its own education.

Whitlow says online engagement needs to be attractive and compelling for participants. The industry average for online participant engagement is currently 7% across major retirement recordkeepers, he says. One reason for this figure is that most recordkeepers have a very difficult login process, according to Whitlow. “It’s not intuitive to think that a long address is where you’ll go for your 401(k) plan,” he says. “It’s an infrequent behavior, so you forget your login password. And there is no motivation for those individuals to engage online with the recordkeeper.”

Using Incentives

Employers and their consultants can sign up on the site, then decide on an incentive. Common choices are gift cards, lunch parties and vacation days. Employees create their own accounts and start learning, monitoring the leader board that tracks “contestant” results. When the contest ends, employees receive awards, which can build camaraderie. The employer gets a report of the analytics documenting their efforts. The data is also used to make better decisions around benefits spending and reduce fiduciary risk.

One of edu(k)ate’s goals is to help employers get all employees into the plan. Even with automatic enrollment, 401(k) participation is nowhere near 100%, Whitlow says. “It should be a top priority to provide basic financial education to all employees to give them the information they need to start. Traditional retirement plan education is generally reserved for the participating employees only. Our focus needs to be on how we can help those who aren't saving start to save, and those who are saving, to save more.”

Edu(k)ate’s current numbers show that an average 40% of a workforce, or six times the national average, create an account; 21% start a course on the website, and 14% complete a first educational course. He expects the numbers to continue to improve as the site is more widely adopted.

“Most people would rather visit the dentist than go over finances,” Whitlow says. “During the financial crisis, some people wouldn’t even open their statements. It can be a very painful topic. At a dinner party, we’ll talk about almost any other topic than finances.”

More information about how the program is structured is on the edu(k)ate website.