According to Cerulli Associates’ research, 25% of plan participants now prefer to receive 401k account information via email. While it still seems low, it’s up from a shockingly low 9% in 2020.
The quality of online tools and calculators also appear to be improving, with 86% of participants saying that savings tools and calculators on their 401k website are very or somewhat helpful, compared to 77% in 2020. Finally, 72% express the same sentiment regarding their plan provider’s online articles, videos, and webinars—up from 52% in 2020.
Not surprising, plan providers are increasingly focused on proactive means to encourage participants to attend to their finances. Communications sent via email blasts and “nudges” can target specific groups of participants using algorithms that determine who will most likely benefit from specific recommended actions.
“Recordkeepers and third-party providers of financial wellness programs have improved online interactions with participants by adopting ‘journey-based’ website designs,” Cerulli noted. “These are guided experiences that help participants accomplish common online procedures, such as enrolling in the plan or making an initial investment selection and improve the quality and relevance of financial education resources.”
Plan providers are also continuing to expand and improve their presence on social media platforms, partly as a strategy to better engage with younger workforce entrants.
“Generation Z exhibits a greater preference for digital communications and social media from their provider compared to participants overall,” Cerulli senior analyst David Kennedy adds. “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.”
Over the long term, Cerulli concludes, an agnostic and agile approach to choosing which communication channels to use is likely to be most effective for plan providers. Technological innovations go hand-in-hand with advances, and disruptions, in communication channels.