Retirement plan providers need a new approach—literally—when itcomes to engaging millennials: going digital.

|

Related: 10 tips to boost retirementsavings

|

According to a blog post from Corporate Insight, millennialsuse, or seek to use, technology and mobile platforms to manage asmany aspects of their lives as possible. But when it comes toretirement plans, many can’t.

|

While millennials are not only much more likely to value mobileaccess to their 401(k)s than their parents are, plan providershaven’t been as enthusiastic.

|

A Corporate Insight survey found that 57 percent of millennialsconsider the ability to manage their retirement plan account via a mobile app “veryimportant” or “extremely important,” versus just 26 percent of babyboomers, but only 10 of the 19 leading retirement plan providersCorporate Insight tracks offer any kind of transaction capabilitiesvia their iPhone apps.q

|

And that, considering millennials’ preferences, is afailure.

|

Although it’s considerably better than it was only four yearsago, when only two out of 17 firms provided such service, the postsays, “the industry has yet to reach the standard set by otherfinancial industry verticals, like banking and brokerage, wheremobile transaction functionality is the new normal.”

|

It’s true that many retirement plan providers have recentlyintroduced mobile apps, but those apps have only limitedcapabilities compared with the functionalities millennials arelooking for.

|

Then there’s the little matter of advice and education. Thanksto the Great Recession, millennials have a low risk tolerance andtend to stick to very conservative investments.

|

In addition, they “highly value advice and are not receivingenough of it,” the post says. With millennials the most likely ofall generations to seek some degree of professional advice, at 89percent compared with 78 percent of boomers, only 58 percent saythey have been offered this assistance.

|

Of course, even among those offered advice, just 59 percent haveactually taken advantage of it—possibly because they perceive it asexpensive and don’t realize that the plan sponsor may be footingthe bill instead of the employee.

|

Better communicating the menu of options available to employeescould correct misperceptions, as well as alert employees unaware ofthe option to its availability.

|

Millennials are also more open to managed accounts, and thosewho have them are likely to say they’re satisfied or very satisfiedwith them.

|

Fintech firms offering low-cost robo options could boost theparticipation of young people in their retirement accounts, and asa means of customization they could be key to improving the resultsof defined contribution retirement accounts in helping employeesprepare for retirement.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.