Building Better Engagement
Art by Maddy Price
In the past, participant education had a fairly narrow role—for instance, explaining investment allocations to stock and bonds. But this has changed significantly.
A recent report from Cerulli, “Driving Participant Outcomes With Financial Wellness Programs,” describes a more comprehensive approach to education. “Individuals must be triggered to enact changes that affect their financial lives in a positive way,” says Dan Cook, a research analyst with the firm. “So, [education] providers must consistently identify engagement strategies that resonate most with specific groups.”
Today, plan advisers have a range of options for teaching participants about their plan. Many partner with a client recordkeeper or outside education firm; others go farther by bringing staff on site. And some of that last group excel at taking a creative approach to engaging and instructing participants face to face. Below, five such advisers share what they do.
Human Element Focus
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BRIAN LAMPSA |
When it comes to employee education, “Our practice focuses on the human element because we think people learn best, face to face. We have formed our practices around that,” says Brian Lampsa, complex manager and senior vice president, investments, with Raymond James & Associates Inc. in Chicago.
Lampsa manages one of his firm’s largest offices, which has 35 retirement plan sponsor clients with cumulative assets of over $600 million. A few of those are 403(b) plans.
“You can’t use the same canned presentation. Participants won’t come back if they hear the same message over and over,” he contends. “We love it when they say, ‘I learn something every time I come to your meetings.’” He also recommends using multiple channels to put one’s message across “because everyone learns differently.”
To pique employees’ interest in attending the plan meetings, each year his firm uses a different, creative approach, starting right from the meeting invitations, to present the concepts of saving and investing wisely. “We come up with a theme, and that’s the campaign for all of our clients for that year, with some customization,” he says.
For instance, in 2018 the theme was “Fake News.” Lampsa explains that, in the meeting, headlines were presented and employees were asked to determine which were true. The presenters put some facts behind every headline—fake or not. “Employees were totally engaged—engaged enough to take the financial education part of the meeting to heart,” he says.
Last year, the theme was “Happiness.” The lead-in discussion was about how the percentage of people who describe themselves as happy remains constant above a certain income per year and why that may be. Also discussed were why people have such a battle with money, why putting money in the right perspective can lead to happiness, and how spending should be in line with earnings.
Lampsa’s practice has also done a series of age-based meetings, targeting workers by age: under 40, 40 through 55, and 55 and older. “The idea was, participants would feel they are getting more custom information for their lives.” He adds that his staff always takes the emotional side in meetings. “Emotions move people; facts don’t.”
For further effectiveness, staff attend public-speaking classes, and they work hard to simplify their message for participants.
“Overall, whenever participants see us, we tell them to bump up their retirement savings by 1%. I recently had a participant come up to me and say, ‘I just got to 13%.’ It was a high-five moment,” Lampsa says. “If we can just touch a few people that way in every single meeting, we believe we’re changing lives. We only hire people for whom that is their mission.”
Start the Conversation
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GEORGE P. FRASER |
“If you find someone with a sharp idea and can get permission to use their stuff, do it,” says George P. Fraser, financial consultant and managing director of the Fraser Group at Retirement Benefits Group (RBG) in Scottsdale, Arizona.
Fraser has operated his practice for 28 years. It has about 40 clients—mostly 401(k) plan sponsors, but he has started advising for 403(b) plans, too.
Fraser fancied the award-winning “Let’s Taco Bout Retirement” truck campaign developed by Jason Chepenik and Chepenik Financial. With permission, Fraser adopted the concept for his “Prepare for a Spec‘TACO’lar Retirement!” campaign.
“While eating together, you can get to know people before the meeting,” he notes. At one such taco lunch, he learned a worker had lost access to a prior retirement account. Her old employer had gone bankrupt and been purchased by another firm, she had found. He helped her get her $18,000 retirement plan benefit from the former employer.
The meetings at his Spec‘TACO’lar Retirement events always start with confronting people’s fear that Social Security “won’t be there” to provide retirement income. He says, people have been told that Social Security will become insolvent, so they need to save at least 15% of their income to have retirement security. This is a daunting thought for many, and “some low-income people don’t even save—they think if they can’t save 15%, it won’t help anyway,” Fraser says.
“The fact is, Social Security will be there. It has been documented, and people will be just fine. That message has changed employees’ attitudes in meetings,” he says.
Fraser will hold up a lottery ticket and tell attendees they have a better chance of being hit by lightning and drowning simultaneously than winning the lottery. Then, he will say, “Let me tell you about the lottery you’ve already won: A $1,000 a month from Social Security, if you live to 85 equals $250,000 in retirement.”
Following the Social Security discussion, Fraser focuses on his trademarked “Pennies on the Dollar” education. “If you talk about saving a percentage of salary, it can sound enormous to individuals. Reframing it to saving pennies on the dollar has resulted in almost 100% participation for our plan sponsor clients,” he observes.
To show what saving pennies on the dollar could mean, Fraser uses the example of a 20-year-old earning $25,000 a year. He says if the employee starts with saving just one penny out of every dollar and goes to six pennies by age 26, by 65 he will have saved $62,608.33. If that grows at just 6%, he will have $296,413.24 at 65.
Presentation is important, too. “We don’t want to come in as smarty-pants advisers. In meetings, we dress in golf shirts and khakis,” Fraser notes. He says his firm encourages the advisers to make the concepts they teach simple for everyone to understand. Individuals come to him and his staff to thank them for doing that, he says.
Message to Relate
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JUSTIN GOLDSTEIN |
His time in the military working with a diverse group of people helped Justin Goldstein, AIF [Accredited Investment Fiduciary], to become good at tailoring communication styles to the recipients.
Goldstein, vice president, advisory services, retirement at NFP Retirement in Madison, Wisconsin, has been working in the plan adviser industry since 2010. His team in Madison has approximately 130 401(k) plan clients.
“I’ve learned that the better you can represent information in terms and numbers that participants can actually relate to, the more effective the message will be,” Goldstein says. “For example, I ask them to think about their gross pay and the first two numbers—and whether, if their next paycheck was $15 less, they would even notice.”
He then explains how that $15 can translate to more income in retirement. According to Goldstein, the concept of increasing retirement income appeals to older participants, while the idea of small steps making a big difference speaks to younger participants. As one young participant told him, “I’ve wanted to do this but didn’t understand before. You made this all make sense.”
Speaking to participants in this way can enliven a potentially dull topic. Goldstein also uses the idea of an interactive game show, with questions participants can answer individually or as a team. “Playing as a team is fun for those with competitive instincts. And if they can play using their smartphone, everyone loves that,” he says. Winners get a small prize such as a free coffee from Dunkin’ Donuts.
For one example of a need his firm filled, a client had decided to perform an investment re-enrollment. It was making new funds and strategies available and wanted these explained through educational meetings, on site.
To help participants understand the new risked-based model portfolio, the NFP team explained that everyone falls within three categories: do it for me, help me do it, or I’ll do it. “We talked about those strategies, and showed how to log in and actually implement the strategy that best fit them,” Goldstein says. “After the group meeting, we had individual sessions so participants could ask questions they didn’t feel comfortable asking in front of the group.”
He says the plan sponsor thought most participants would be defaulted and not take any action, but the meetings drove a substantial number to select investments, themselves.
On a smaller scale, just taking some simple steps can be helpful. For one, Goldstein has the same advisers return for each meeting. “It builds trust and expectations after hearing the person before,” he points out.
Another is a keeping a future-perspective in mind. “We’re all saving money for this older version of us who is really a stranger,” he says. “You don’t know what the 65-year-old you will be like, but you’re the one who will support that person. It’s an effective message.”
‘Show Them the Money’
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DAVID GRIFFIN and JACKIE DECKMAN |
Often, at retirement plan participant meetings, David Griffin, founder, director, institutional retirement plans at Atlanta Retirement Partners LLC—the 2019 PLANSPONSOR Retirement Plan Adviser of the Year Small Team winner—in Atlanta, will take a dollar out of his pocket, ask a participant for a dollar, then give that person back the dollar, plus his own. He may do the same with five dollars. In this way, he demonstrates the employer match. “People come into meetings because they know I’m giving out money,” he says. “All you have to do is show them the money.”
Showing participants the money they could save based on their own financial situation is a focus for his meetings.
The firm also created a financial boot camp—even selling it to others because of the program’s success, Griffin says. We consider several variables when customizing a program. These include employee age, level of investment sophistication, debt load and importantly, employee input and feedback through surveys. Topics covered include home buying, student loan or credit card debt, 529 plans, Social Security and Medicare, and, for those over 50, “retirement red-zone decisions” to do with saving, spending and tax efficiency.
“Gamification is something we’ve found helpful,” Griffin says. “Participants receive prizes for making progress through different modules or receive monetary prizes for making it through all of Boot Camp.”
Jackie Deckman, plan adviser at Atlanta Retirement Partners and author of the firm’s financial wellness program, agrees that playing games in a meeting makes it fun and engaging. Then to further engage participants, she says, sharing is crucial. “I have them look at monthly expenses and identify those that recur; then I share an example of something I negotiated, such as a cable bill and how much I saved. Or I may share how buying contact lenses online saved me money. I’ll ask them for examples from their own life of how they’ve saved. People are always proud to share their accomplishments,” she notes.
Another key to making the camp effective is to create an intimate group of peers, Griffin says. “People are more apt to share and have a competitive nature with people in a similar job role or of a similar age,” he adds.
At the end of the custom boot camp, which lasts for 12 or 18 months and includes group meetings as well as one-on-ones, clients are able to measure how the program has moved the needle both in terms of saving in the retirement plan and reducing employees’ financial stress.
Whatever program a firm provides for its clients, Deckman suggests keeping the meetings to around 30 minutes. “Education needs to be short, and it needs to be relevant. It should be about something participants are living and give actionable ideas they can use,” she says.
She recalls one meeting—not a part of boot camp—where a senior executive had encouraged attendees to save up to the employer match. He shared how much he had freed up by taking recommendations from similar group financial wellness meetings.
“Even I learn things,” Deckman says. “I make notes of recommendations and double-check them.”