Interactive Financial Education Better Engages Gens X and Y

There are personality traits of Generations X and Y that can drive retirement and financial education strategies.

According to Matt Iverson, founder of Boulevard R, Gen X (ages 38 to 49) can be described as cynical, entrepreneurial, realists and guarded. So, communication must prove value, provide transparency and include scenario planning to resonate with this generation.

Gen Y (ages 18 to 37) can be described as confident, smart, optimistic and collaborative, Iverson said during a webinar. Communication with this generation requires customization, authenticity and multiple resources.

Key trends affecting these generations include the growth of mobile communications. Iverson cited studies that show 56% of U.S. adults own a smartphone—even more of Gen Y than Gen X do, and as income increases, so does the percentage who own smartphones. Tablet ownership is at 34%, and Iverson anticipates this will continue to grow.

“Mobile tech is transforming education—changing the nature of interactions— and this will seep into employee communications,” Iverson said.

He suggests, instead of a lecture during which employees may lose attention, employers should give a short presentation, then provide everyone with an iPad and have them do their own retirement readiness assessment. “You’re not just pushing information, you’re making it interactive,” Iverson told webinar attendees. The key is to make it easy to take action, he noted. At the end of the assessment, employees can enroll in the company’s retirement plan, request a one-on-one meeting with an adviser, change their deferral rate or rebalance investments.

Boulevard R’s Retiremap solution includes this type of workshop, and Iverson said about half of workshop attendees request a one-on-one meeting and about half double their deferral rate.

With advances in technology has come the availability of more data. Iverson said plan sponsors can use aggregate data and break it down to understand patterns. “This can be used to understand who has challenges and who needs help with them,” he stated.

There is a new focus on participant outcomes and retirement readiness, but this should include a focus on household situations, including short-term financial issues and others savings outside the retirement plan, Iverson contended. Plan sponsors can also gather an assessment of employees’ short-term and long-term financial goals, and customize education to help participants with house-buying decisions, eliminating debt and saving for college expenses.

Finally, Iverson suggested plan sponsors leverage advisers and provider representatives. “Arm them with the data gathered so they can have a productive, impactful conversation with employees,” he said. “Keep employees accountable and do follow up meetings.” Iverson noted that even if a plan’s adviser or provider changes, the data will always be there.

According to Iverson, plan sponsors’ return on investment (ROI) in better education will be better productivity of employees, tax savings for employees and having employees that are able to retire on time.