A research report entitled Patterns of Participant Use of Plan Websites published by Spectrem Group that was based on 402 in-depth 401(k) participant telephone interviews found that most plan members stay away from their company’s provider Internet page.
The report also offers insights for advisers who can play a key role in asset retention strategies, and who increasingly leverage the online capabilities of the provider community to reinforce and extend their relationships.
“As plan participants increasingly move towards retirement, forward thinking plan providers must determine how to develop a relationship with the plan participant if they wish to retain their assets under management,” the report declared. “In many cases, the Web site is the only “relationship’ the provider has with the participant. It is the “face’ of the provider and therefore must provide a positive experience.”
According to the survey, 64% participants said they visited their plan provider’s Web site once a month while, on average, 23% log on two or more times per month. Of those indicating a specific reason for not going online, a preference for using statements or other written materials was mentioned most often, with those age fifty and older most likely to feel this way.
Other survey results included that:
- most participants visiting their plan’s Web site do so for informational purposes. Specifically, on their most recent visit, they were most likely to either check their account balance or the performance of their investments.
- while investment educational offerings are among the most common features of plan Web sites, of those participants aware of these offerings (92%), only one-fourth (27%) actually look at the material. They apparently don’t care much for what they find. Only 25% say they are Extremely/Very Satisfied with the information provided.
- While many providers often supply links to outside resources regarding investment-related and product-related information, others are missing this opportunity to draw participants to their sites. The proportion of participants desiring these features (Investment Research, 50%; Product Information, 50%) is greater than the reported frequency with which providers fulfill that desire (Investment Research, 40%; Product Information, 35%).
- The majority of participants would like to be notified via an e-mail alert when the performance of their investment spikes either up or down.
- As the threat of identity-theft continues to increase, privacy concerns loom large for participants, of whom nearly nine in ten describe themselves as either “very’ (44%) or “somewhat’ (41%) concerned over the electronic transmittal of their personal information.A research report entitled Patterns of Participant Use of Plan Websites published by Spectrem Group that was based on 402 in-depth 401(k) participant telephone interviews found that most plan members stay away from their company’s provider Internet page.
Spectrem also used the report to suggest steps plan providers and plan sponsors could take the pump up participants’ Internet usage. For example, providers and sponsors should add a brochure to hard-copy mailings that specifically addresses benefits of logging on to the provider’s Web sites. Specifically, the brochure should highlight the accessibility of account balance and fund performance information, along with relevant screenshots and directions that could help the less Web-savvy navigate through the site.
Also, providers should make sure that hard-copy materials and the Web site stress the benefits of communicating with plan representatives via e-mail. These benefits would include the lack of busy signals and reduced waiting times. Employers could also add “chat” capability to the “how to contact us’ section, Spectrem said.
According to Spectrem, plan providers should also:
- Make sure that their Web site has an interactive component to supplement their written materials. While only four in ten participants say that their provider’s Web site has both written and interactive components, nearly six in ten said that they would prefer to have both available.
- Offer links to Web site s providing information related to investment research, product information such as rollover IRAs, and financial news sites.
- Provide the option to receive e-mail alerts when participants’ investments spike either up or down. Indeed, six in ten participants overall, and eight in ten of those under the age of thirty-five, felt that this would be at least a somewhat important feature.
- Stress the effort plan providers have taken to address participant privacy concerns. This cannot be overstated with nearly one-half being very concerned about this and nearly nine in ten (85%) expressing some level of concern.
- Develop marketing materials targeted specifically to those with account balances greater that $50,000 that would stress the availability of investment educational materials. Not only is this group the most likely to currently take advantage of these materials, they are also more likely to be unaware that such information is even on the Web site.
The Bottom Line
The bottom line, according to Spectrem: Providers have strong incentives to make their Web sites as inviting as possible.
“Ensuring that plan participants have an incentive to access the Web site and a satisfying experience once they do should matter to plan providers,” Spectrem researchers wrote. “One major reason for making the effort to add value through an easy-to-use and informative Web site is that the more a plan participant uses and depends upon a Web site, the more likely he or she is to seek further services from a provider or leave assets with a provider upon retirement. …this is a great opportunity for plan providers to strengthen their relationship with participants by at least partially assuming an adviser role through not only providing timely and relevant educational investment information, but also by using their web site as yet another channel to increase meaningful contact with participants.”