Seventy-four percent of retirement plan participants would welcome more information about financial products and services from their providers, according to Cogent Reports’ annual DC Participant Planscape.
This jumps to 80% among Millennials and Gen Xers. In addition, participants said they wouldn’t mind if the providers contacted them directly, rather than through their employer.
“Since the average plan participant maintains a relationship with 1.7 former plans, providers are sitting on a gold mine,” says Sonia Sharigian, senior product manager at Cogent. However, engagement between defined contribution (DC) providers and participants is week. “Contact is typically limited to receiving quarterly statements or the occasional visit to a company’s website,” Sharigian says. “Our data suggest investors are not only open to but looking for more meaningful engagement with both current and former providers.”
One product participants would be interested in is rollover individual retirement accounts, particularly if the provider makes the process easy for participants, according to Linda York, vice president at Cogent. “Examples of firms that we see scoring well on this attribute are Fidelity, Vanguard, USAA, Wells Fargo and American Funds,” she says.
Cogent’s report is based on a survey of 4,638 plan participants that Market Strategies International conducted for the firm. All participants are currently contributing to a plan and have a balance of $5,000 or more in a prior plan. Information about how to purchase the full report is here.