Retirement plan providers are in sync with savers who are increasingly looking to technology to engage with their plans, according to a recent report.
Providers are investing in technology and relying on automation to complement “human-provided services,” Cerulli Associates says in a recent report.
Email blasts and “nudges” are some of the areas where providers are using algorithms to zero in on the participants who would most benefit from certain recommendations, according to the research firm.
And recordkeepers and third-party providers of financial wellness programs are seeing a boost in online interactions with participants through “journey-based” website design, which can guide users to enroll in a plan, make an investment or connect with various financial education resources, Cerulli says.
Plan participants are embracing these developments: 25% of them now prefer to get their 401(k) account documents via email, compared to 9% who did in 2020, according to the report.
In addition, 86% of participants believe calculators and savings tools are very or somewhat helpful, up from 77% in 2020, and 72% find providers’ articles, videos and webinars offered online to be very or somewhat helpful, up from 52% two years ago, Cerulli says.
Providers are also relying more on social media to engage with younger plan participants, according to the report.
"Generation Z exhibits a greater preference for digital communications and social media from their provider compared to participants overall,” David Kennedy, a senior analyst at Cerulli, said in a statement. “Building a positive and encouraging experience with a recordkeeper at this early stage in Gen Z participants’ financial lives may make them more likely to continue an investment relationship in future decades.”
Kennedy warns, however, that plan providers shouldn’t get complacent.
“As disruptors inevitably gain momentum to become major communication networks, providers should be prepared to adapt so that the relevance of their messaging isn’t undermined by the decreasing relevance of the channels used to deliver it,” he said in the statement.