Data & Research September 25, 2015

Retirement Plan Participants Want to Be Socially Responsible

Nine in 10 want investments to align with values.
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Responsible investing options resonate with retirement plan participants, as nearly nine in 10 say they want their investments to align with their values, according to a survey by Calvert Investments.

However, there is a need to further educate participants given that only 37% say they are familiar with the term “responsible investing.” After being read a definition of responsible investing, seven in 10 (72%) indicate a likelihood to invest in a responsible investing product in the next 12 months and, among these participants, 47% prefer to invest with a firm that specializes in responsible investing.

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The vast majority of participants (89%) find the concept of responsible investing appealing, with four in 10 saying it is highly appealing. Ninety percent of eligible non-participants also find the concept appealing. More than half of eligible non-participants (56%) indicated they are more likely to participate in their retirement plan if it offers a responsible investing option.

Eight-two percent of respondents indicated they are likely to select a responsible investment option if offered by the plan, with nearly one-third of those interested claiming they would direct all their plan contributions to responsible investments. Millennials were the most motivated, with 46% of that segment indicating they would direct all of their plan contributions to responsible options.

Two-thirds of participants assume responsible investing funds will be as good as or better than other mutual funds in terms of risk, volatility and performance.

The survey found satisfaction with and likelihood to recommend one’s employer is higher among plan participants who are pleased with their retirement plan, and that retirement plan satisfaction is higher when participants believe responsible investment options are offered. The study also found that perceiving an employer as trustworthy and a good corporate citizen is just as or more important to company loyalty as perceiving the firm as providing competitive salary and offering good benefits. 

Calvert surveyed 1,231 defined contribution retirement plan participants, including 401(k), 403(b) and 457 plan participants, and 295 eligible non-participants between July 29 and August 10. A report of selected highlights is available here.

Products September 25, 2015

Financial Wellness Can Be Branded Content for Advisers

A research series helps advisers establish thought leadership.
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Retiremap has launched Financial Wellness Insights, a monthly research series that will focus on a range of financial wellness themes. The current issue, for example, takes a deep dive into the financial habits of Millennials, who may be saving slightly less than their Gen X and Baby Boomer counterparts, but are demonstrating impressive decision-making when it comes to retirement savings. The growing interest by employers and advisers to learn and provide more assistance with the financial wellness goals of employees sparked Retiremap to create the series.

The series is designed to help advisers demonstrate thought leadership, and the reports can be white-labeled with an adviser’s brand, at no charge, to present to clients and propsects. “It’s a value-add for advisers who use Retiremap, as well as those who currently do not use it,” says Matt Iverson, chief executive of Retiremap. “White-labeling the report makes it easy and beneficial for advisers to share the latest financial wellness research with clients and prospects,” he tells PLANADVISER.

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Each issue of Financial Wellness Insights aims to provide actionable information to help employers and advisers better understand employees and how they can strengthen their financial wellness offerings. The series blends in-depth analysis of employee data and highlights of research from throughout the industry, case studies and industry best practices.

Upcoming topics will address financial goals, case studies of successful financial wellness programs, more demographic analysis of debt and savings habits, and evolving adviser responsibilities. Topics may change depending on feedback from advisers or other trends worth covering.

Retiremap finds that Millennials stack up surprisingly well against Baby Boomers and Gen X-ers across a number of key financial wellness indicators, including debt and savings rates. Millennials have far less liquid savings than Baby Boomers and Gen-Xers but are steadily catching up with an overall monthly savings rate of $425. Even though a higher percentage of Millennials carry debt across all categories measured, Millennials have less debt, in dollar amount, than Gen X-ers.

“The research reveals that Millennials are aware of their responsibilities, which is a crucial first step in the path to financial security,” says Julia Chen, researcher at Retiremap. “It’s also a strong signal for advisers that Millennials want to be engaged and educated around financial issues.”

The research can provide talking points and help advisers connect the dots for plan participants. “We’ve found that the key to engaging Millennials is focusing on their financial goals, while providing a visual planning process,” Iverson says, adding that the Insights series is meant to share the broad financial wellness trends Retiremap is seeing through the firm’s implementations with advisers.

Retiremap partners with retirement plan advisers and their plan sponsor clients to provide an award-winning financial wellness program to help employees achieve their financial goals.

This month’s research on Millennials can be found on Retiremap’s website, along with information on white-labeling.

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