Compliance January 9, 2013

Social Media Can Help Build Financial Brands

Financial services firms can promote their brands inexpensively and effectively using social media campaigns.


 

 


 

Reported by

However, there are many obstacles to using these channels effectively, the biggest being regulatory limits on what can be said to whom. Also, there is the lack of clarity as to what topics social media users will find interesting enough to follow. Securian Financial Group decided to stop worrying and forge ahead with a social media pilot program. 

The firm recently finished a YouTube campaign entitled “Long-term goals need a long-term partner.” They hired an actor, grabbed a camera and visited a local park. They asked passerby’s about their views on topics such as personal goals, financial strategies, debt and retirement savings. The interviews resulted in four videos posted on the company’s YouTube channel.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

“We knew that if we waited for ideal conditions to launch a social media campaign we’d fall behind the curve,” said Angela Schema, manager of communications at Securian. 

“Finding a way to be both creative and compliant with social media was a win,” Schema added. “Even better, our results show that our long-term value proposition is resonating and we can build a social media community around our brand.”
 

 

Schema offered these tips for financial services firms thinking of using social media to promote their brands:

  • Understand your company’s social media policy and work with your legal and compliance departments. Regulations may prevent you from promoting specific products or services, but you can promote generic brand messages, community service news and awards, Schema told PLANADVISER (see “Compliance 2.0: Social Media”).
  • Set clear objectives and put together a marketing plan. Schema set out to increase Facebook “Likes” by 25%, increase Twitter followers by 15%, build brand recognition and promote Securian’s commitment to helping people reach their long-term financial goals. The campaign exceeded the measurable goals. Facebook likes rose 27% and Twitter followers increased by 19%. “I think our campaign was successful because we decided what would make it a success, and then we structured it so it would meet our goals,” Schema said.
  • Promote your campaign in every way possible. After the second week of the campaign, Securian posted the videos via Facebook ads. “That helped boost the number of views,” according to Schema. “If I could redo the campaign, I would have started that process earlier.” Schema also used Twitter and her personal LinkedIn page to promote the videos.

While a social media campaign may seem expensive, it doesn’t have to be. Schema said Securian operated on a very small budget, utilizing existing staff and hiring a small crew to conduct the interviews. “Considering we exceeded our two quantitative objectives – and I believe also met our qualitative objectives – it was money very well spent,” she said.

The videos are available here.

 

Data & Research January 8, 2013

DC Plan Sponsors Focused on Compliance in 2012

Callan’s “2013 DC Trends Survey” indicates that in 2012, defined contribution (DC) plan sponsors spent their time on compliance matters.
Reported by

Plan sponsors also say compliance will be their top area of focus over the next year.  

Eighty-four percent of plan sponsors took steps to ensure that their plans are Employee Retirement Income Security Act (ERISA) section 404(c) compliant. The percentage of plans that did not know whether their plan is 404(c) compliant or not declined relative to prior years.   

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

The proportion of DC plan sponsors that reviewed their plan’s investment policy statement (IPS) in the past year rose to 63% in 2012 from 55% in 2011. More plan sponsors have a written plan fee payment policy in place (41%) than in 2011 (38%), either as part of their IPS or as a separate document.  

Compliance with required Department of Labor (DOL) disclosures ranked third in the list of plan sponsors’ areas of focus surrounding plan fees for 2013, after ensuring that fees are reasonable, and sufficiently monitoring and documenting plan fees.

Fees   

Plan sponsors’ greatest challenge in complying with the DOL’s plan sponsor fee disclosure regulation is “understanding the requirements,” followed by “knowing what appropriate actions to take relating to the disclosures.” Many plan sponsors have not had any issues with the DOL’s required participant disclosures, and “none” ranked highly on the list of compliance challenges. Some sponsors noted that “all items are performed by recordkeeper,” meaning they believe they have effectively delegated this responsibility to their vendor.  

More than four in 10 plans that use revenue sharing to offset administrative expenses limit their disclosures about these offsets to what is required under ERISA 404(a)(5). However, 18% of plan sponsors do not know how revenue sharing is disclosed.  

Plan sponsors range widely in how they are implementing the DOL’s requirement to show participants a “broad-based securities market” benchmark in disclosures. The most common primary target-date benchmark in disclosures is a market index, such as the S&P 500, DJIA, or MSCI, followed by a third-party target-date index, such as Morningstar Lifetime Allocation Indexes, S&P Target Date Index, or Dow Jones Target Date Indices. Nearly 14% of plan sponsors are not sure what benchmark is used in participant disclosures.  

Most plans’ administration expenses are paid by participants, and are often at least partially paid through revenue sharing. However, it is rare that all of the funds in the lineup pay revenue sharing (2%). Most commonly, 51% to 99% of the plan’s funds pay revenue sharing. The proportion of plan sponsors that do not know how many of their funds pay revenue sharing declined materially in the past year—from one in five in 2011 to under 7% in 2012. More than half of plans with revenue sharing have an ERISA expense reimbursement account, up from just over one-third in 2011 and around one-quarter of plans in 2009.

Automatic Features  

Prevalence of automatic enrollment continues to hover at around 50% of plans, as it has for the past few years. Adoption of automatic contribution escalation continues to slightly lag automatic enrollment, with 43% of plans allowing participants to automatically increase deferral levels.  

More than half of plan sponsors that offer target-date or target-risk funds used the proprietary mutual fund or collective trust of their recordkeeper in 2012 (59%), and a slightly lower percentage (54%) intend to do so in 2013. The prevalence of passively managed target-date funds now marginally surpasses that of actively managed options (38% and 37%, respectively). Nearly two-thirds of plans (64%) offer target-date funds with some amount of indexing in the underlying fund allocation. In contrast, all-passive fund lineups are rare within DC plans (1%).  

Investments   

Inflation ranks highest on plan sponsors’ list of concerns, followed closely by a double-dip recession. In 2012, 30% of plans that expanded their fund lineup added inflation-protection type funds, such as real return, real estate investment trusts (REITs) or treasury inflation-protected securities (TIPS). One in 10 plan sponsors surveyed that expanded their fund lineup added alternatives. An additional 14% added stand-alone emerging markets equity funds.  

Most plan sponsors (74%) do not offer income-for-life solutions within their DC plan. Prevalence of in-plan guaranteed income-for-life solutions remains low at 7%, but increased materially from 1% in 2011. Nearly 14% of plan sponsors are somewhat or very likely to offer an in-plan guaranteed income-for-life solution in 2013.  

Reasons plan sponsors give for being unlikely to offer an in-plan guaranteed income-for-life product in the near future include concerns about fiduciary implications, and that such products are “unnecessary or not a priority.” However, more than half of plan sponsors provide a retirement income projection showing plan participants how their current balance may translate into monthly income in retirement.

«