Retirement providers spend approximately one-third of their total costs on participant communication-related activities — and in recent months, a third of a shrinking budget due to significant fee compression across the industry, according to a new report.
A new report by Broadridge, in association with Oculus Partners, notes that leading competitors are bringing strong capabilities onstream, building an infrastructure that supports sustainable, consistent and predictable participant experiences across their entire business base.
Here, according to the report, are eight factors driving heavy investment in innovation in participant experiences.
1. The Retirement ‘Crisis’
Not only do 86% of Americans believe the nation faces a retirement crisis, the private single-employer DC plan is under pressure against emerging new programs such as state-run multiple employer plans, automatic IRAs and MyRAs. The report notes that getting participants and plan sponsors to believe in their plan has become urgent and requires brand new thinking — and great experiences are proven to create strong advocacy.
2. Retail Consumer Experiences
The report notes that today’s consumers have high expectations for service, support, convenience and enjoyment in interacting with their brands of choice, though the financial industry is just beginning to use retail techniques and ways of thinking in designing their participant experiences.
3. Expanded Contact Channels
While there used to be just meetings and phone calls, the report says that today there are multiple person-to-person, digital and external channels, all of which have to work seamlessly together to create a connected experience.
4. Adjusting to an ‘Automatic’ World
The report notes that while the Pension Protection Act of 2006 helped to jumpstart the use of automatic program features in plans, communications in this so-called “automatic world” have not sufficiently evolved. New experience designs are making the most of automatic features such as enrollment, escalation, diversification and reinstatement.
5. Diverse, Multi-generational Workforce
The report notes that now there are not only at least four generations in today’s workplace, the workforce has also become globally mobile. This diversity of audience creates the need to vary experience design for the various cultures and generations.
6. Expansion of Conversation to Financial Wellness
There is an emerging understanding that retirement is not a stand-alone conversation, and to enable retirement readiness, the report notes, each individual must stand on a foundation of financial wellness overall. Much as physical wellness programs have helped shape the future of health care, financial wellness programs can shape the future of retirement planning.
7. Shift in Focus Toward Income Rather Than Assets
The report claims that we’ve moved beyond the ‘what’s my number’ conversation to a dialogue about the income needed in retirement… and the amount of income that savings can buy. This, in turn, has resulted in a shift in thinking from a "point in time" conversation to a lifelong experience and affiliation.
8. Continued Pressure To Do More with Less
Today’s providers do not have the luxury of producing ineffective or inefficient communications. The report states that every interaction must count, and experiences must be designed based on a scalable infrastructure to deliver competitive value at a competitive price.
