Text Messages Might Help People Save

A new study in three countries found that sending a simple text message can remind individuals to save.

The study by a group of economists found that sending out text reminders to individuals’ cell phones increased savings balances by 6%. The study challenges the idea that people don’t have enough self-control to save, according to a Dow Jones news report.

Instead, Dartmouth University Economics Professor Jonathan Zinman, one of the study’s four authors, said savings just isn’t at the top of people’s minds. “Basically all we did was remind them,” he said.

The study also found that while positive or negative language didn’t have a significant effect on the savings rate, mentioning a customer’s specific goal did. In addition, when reminders mentioned incentives offered by the bank for consistent deposits, bank savings increased by almost 16%, according to the news report.

The economists conducted their study in three locations in the developing world, but said they are confident the results would translate to the U.S. In three cases conducted in the Philippines, Peru, and Bolivia, the economists teamed up with local banks to send reminders to people randomly selected from those who had recently opened a savings account.

The banks sent several different types of messages, including letters in Peru and text messages in Bolivia and the Philippines. Some used negative language to stress the consequences of not saving money, such as this message used in the Philippines: “If you don’t frequently deposit into the Gihandom Savings account, your dream will not come true.”

Envestnet Introduces Retirement Income Solution

Envestnet has unveiled a retirement income solution for registered investment advisers (RIAs) to help clients plan for retirement.

An announcement said PlanHorizon is a fully integrated time-segmented distribution strategy on the Envestnet platform developed to bridge the gap from wealth accumulation to retirement income distribution.

Through PlanHorizon, advisers can access a comprehensive set of tools that allow them to:

  • plan their clients’ retirement investment courses that balance current income needs with the potential performance results needed to possibly sustain wealth through volatile markets and inflationary periods;
  • implement that plan with a range of investment solutions that may include investment recommendations offered through the platform; and
  • monitor the progress of that plan with informative, goals-based reports that give advisers the insight needed to make adjustments, which may include harvesting gains that can be reallocated to a lower risk investment product in order to lock in future income needs.

“Within a time-segmented distribution strategy, an investor’s retirement assets are divided into segments and invested according to appropriate risk-tolerances to provide income over unique periods of time during retirement. Near-term income needs are protected through more conservative investments while longer-term segments are monitored and adjusted for changing circumstances along the way,” said Eric Fowler, SVP, director of Product Development at Envestnet.

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More information is available at www.envestnet.com/retirementsolutions

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