Retirement plan advisory firm Accelerate Retirement has launched a national alliance of retirement plan advisers interested in building a business that competes with larger firms, while continuing to own their book.
As aggregators of retirement plan advisory practices continue to proliferate, many entrepreneurial advisers want to remain independent and grow their business over years or decades, the firm says. At Accelerate, retirement advisers can remain independent, with access to an integrated practice management platform, technology, resources and a national brand.
The technology engine behind Accelerate is a version of RPAG’s adviser platform, including national branding and marketing automation; back office operational support and custom report creation on behalf of the adviser; sales tools and templates; integrated financial wellness; and exclusive access to low-cost active single manager and target-date fund (TDF) collective investment trusts (CITs).
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An Empower white paper makes the case that retirement plan sponsors and advisers should use simpler language in retirement planning communications, finding that participants are more likely to act on their retirement plans if they receive direct language.
The report, conducted with research from the Harris Poll, stresses the importance of simplicity in communications, explaining that financial terms such as “deferral” and “allocation” can scare employees away from participating in a plan. When asked if commonly used financial terms make them hesitant to talk about money, 44% of respondents in the Empower report answered yes.
The report also filtered its answers by age groups, noting that younger generations are more likely to be hesitant to talk about their finances than older generations. Sixty-one percent of Generation Z respondents said financial terms make them feel hesitant, while 52% of Millennials, 43% of Generation Xers and 33% of Baby Boomers agreed.
Empower underscored the importance of using the right words when discussing financial matters. Small changes can correct any confusion, for example by using the phrase “employer match” instead of “match” or “employer contribution.”
The terms “match” or “employer contribution” can sound highly technical to participants, or like jargon, the report argues. For the average investor or employee, such terminology can be unclear or even off-putting. Research from Ohio State University found that reading technical language led to participants feeling more confused when they were consuming content, and, in retirement planning communications, this can result in participants saving less or being unwilling to contribute to their accounts, Empower says.
When asked for what they wanted in retirement planning communications, respondents in the Empower report said their desired language would be brief, concise or direct; efficient; simple or easy to understand; informative or educational; relatable; participant-centered; personalized; and engaging or attention-grabbing.
For example, instead of “asset allocation,” Empower recommends using “investment balancing.” Instead of the acronym “IRA,” use “personal retirement account” or its full name, “individual retirement account.” Additionally, respondents in the survey preferred “complete financial picture” rather than “holistic financial view,” and “certified financial adviser” rather than “fiduciary adviser.” Thirty percent of participants in the report also preferred that an adviser be described as as “a financial professional that must legally act in your best interest.”
Participants were also more likely to understand the term “investment balancing,” rather than “diversification,” “asset allocation,” “portfolio distribution,” or “investment allotment.”
Participants were also asked about how they want to learn about retirement planning. Younger participants said they were more interested in virtual meetings and text messages, while older savers said they preferred in-person contacts.
Millennials (described as those ages 25 to 40) were more likely to listen to a podcast on finances or retirement, chat online, read a blog or online article, look on social media, attend a virtual meeting, or log into an online retirement account than Baby Boomers. Baby Boomers (those 57 to 75), instead, would prefer to receive mail communications, one-on-one in-person meetings and personal emails.
More information and findings from the study can be found here.
