Some participants look beyond their employer for help. Only about one-quarter turn to financial advisers, and many mistakenly believe they don’t have enough account value to warrant one. Meanwhile, 83% said they frequently discuss investment choices with spouses or domestic partners—a large number, but not very revealing of whether those conversations lead to good decisions.
All this leaves some large gaps, where sponsors remain the most logical source of financial guidance—and it doesn’t have to be exclusively related to retirement. In fact, we think widening the range of topics can pique more interest and improve engagement levels over time.
Cover Broad and Timely Topics to Encourage Wider Involvement
In our view, it’s a good idea to offer topics that participants are most interested in, like responsible investing, or that they’re currently worried about, such as the economy or market volatility.
Most recently, for example, inflation has been a growing concern. Participants and retirees alike may appreciate ideas on how rising prices may be affecting their savings or income strategies, along with possible action steps in this kind of environment.
Market volatility is another timely topic that needs perspective. In this case, there’s nothing sponsors can do to change market conditions, but a lot can be done to remind participants of the benefits of thinking long term, staying engaged and remaining diversified.
Responsible investing, which takes different forms, is another area sparking greater participant interest. A resounding 83% of survey respondents said it’s important that investment options adhere to their core ethical values, albeit with some consideration of returns and costs. Overall, two-thirds were somewhat or very likely to invest in such funds (Display).
Why not relate to this growing passion? For instance, participants could use guidance around the distinct types of responsible investing—from ESG integration to stand-alone solutions that include ESG goals—whether they’re available in the plan, via brokerage windows or both.