Nearly two-thirds (63%) of deferred contribution (DC) plan sponsors are using social media as a regular source of information for 401(k) plans and for the providers that serve this market, according to a study by Cogent Research. While many providers continue to dedicate more time and money to more traditional forms of communication and outreach, such as e-mail or direct contact with an adviser or firm representative, plan sponsors are more often linking to plan providers through websites or blogs (39%), LinkedIn (24%), and Facebook (22%) to share or seek news and opinions related to 401(k) plans and providers.
“The prevalence of social media activity among DC plan sponsors is much higher than we anticipated,” said Linda York, practice director of syndicated research at Cogent. “These results indicate that a social media strategy, if it hasn’t already, should be an integral component of any provider’s overall communication plan.” The findings are from Cogent’s recently released “4th Annual Retirement Planscape 2013” study. (See “Automatic Plan Features Adoption Stalled.”)
The use of social media for 401(k) information was highest among mid-sized plan sponsors, who represent plans with total assets of between $20 million and $100 million. Within this segment, 77% of plan sponsors utilize some form of social media for 401(k) informational purposes, with nearly half (47%) reporting regular use of provider websites or blogs. LinkedIn is the second most popular channel among midsize plan sponsors, cited by 39% of respondents.
Cogent’s study found the use of social media among 401(k) sponsors was lower among plans with higher asset levels, with just half of plan sponsors representing plans with greater than $100 million utilizing social media for information related to 401(k) providers. “The difference in social media usage by plan size points to the need for targeted communication strategies for each segment,” York said. “The larger, more established plans require a different level and type of outreach, often requiring more personal and direct communication.”
The study is based on a representative survey of more than 1,500 DC plan sponsors across all plan sizes and industries. Highlights of the study can be found here.