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Print Communications Still Key for Many Participants

New research from the TIAA Institute compares the performance of print versus online plan communications.

By Amanda Umpierrez | July 03, 2017
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All retirement plan sponsors, advisers, fiduciaries, recordkeepers, etc. can wholly agree: understanding financial communications and education is rarely ever a participant’s strong suit.

In an effort to find out how workers understand financial communications regarding retirement savings plans, and how participant knowledge can affect asset-allocation decisions, the TIAA Institute, in collaboration with the Pension Research Council, conducted research about how specific media communications (print vs. online, graphical vs. text), affects a worker’s comprehension of financial material.

Plan providers are using technology to move to more online and digital communications, especially as they perceive that Millennials would prefer to be communicated with in this way. Tim Slavin, senior vice president, Retirement at Broadridge Financial Solutions, says, “People want to be able to be communicated to in a way that’s easy for them. They may not want just an email and they certainly don’t want just paper. But they do want to get information that’s more meaningful to them and matters to their age group.”

The research concluded that most participants tended to skim through online material, whereas those who read written content gained a thorough, enhanced understanding.

“We were interested in how well people comprehended financial communications, specifically about retirement and particularly written communications,” says J. Wesley Hutchinson, a professor of Marketing at the Wharton School of the University of Pennsylvania, and a researcher for the report “Financial Communications and Asset Allocation Decisions: The Effects of Reading Style, Financial Knowledge, and Individual Differences.” He adds, “Knowing that the financial industry in general has massive amounts of written materials, we thought it would be a good time to examine that.”

The research was conducted in 2016, among staff at the University of Pennsylvania, Hutchinson explains. He notes participants have similar financial traits with one another i.e., all are employees of the University of Pennsylvania—where the study was directed—and each held a similar retirement plan, etc.

Interestingly, in an age where technology and social media consumes Millennials, more than half of research participants were from that generation, meaning a large fraction of Millennials responded better to print communications.

NEXT: Graphics vs. text