By Chris Englebert
“Chris Englebert is a Retirement Plan Specialist working with 401k, 457 and 403b Plans. He has a long experience with institutional consulting of the highest level. We are pleasd to feature this guest article, and look forwrd to follow up articles from Chris.” JL
The challenge many advisors are faced with in the defined contribution space is how to best engage participants in a defined contribution plan. The strategic, tech savvy defined contribution advisor will soon take the place of the old style “Run and Gun” advisor. Not only are participants and plan sponsors demanding more, but also there is an even greater expectation on delivering on what was promised. Our firm has always focused on large defined benefit plans (DB), but the defined contribution (DC) space remained a mystery until about 10 years ago. Trustees were constantly asking us during the DB meetings if we could advise them on their individual DC plans. We then sat down and asked ourselves, “If we were going to build a DC business, what would it look like?” We knew that we had to “unbundle” all the parts of the DC plan, the custodian, the third party administrator, and the investments and provide some type of participant advice. We saw the industry moving towards fee transparency and the RIA model. Once we did the above, the lingering question was ‘How do we engage participants?’ Everyone has done the obligatory sign up lunch meeting in a warehouse with 30-40 employees, where you give out a sign up kit and over the roar of the forklift try to explain how the 401k plan works. If the company is big enough, you might do two or three meetings; and hit only a fraction of the employees. Many companies have internal “benefit fairs”, where the benefit providers come in and talk. These are all good, but advisors need to find engaging ways to continually be “in front” of participants. This is where technology comes in. For those interested in staying ahead of the curve with technology, here are two innovative and social media friendly marketing tools to help your defined contribution business.
CardTapp
CardTapp is a personalized app that the advisor can encourage participants to download on their smart phone. What is nice about this product is that it can be customized to the advisors business. During sign up meetings, we provide several different ways that participants can download and access the app. The first page of the app contains the advisor’s contact information and provides several ways for the participant to contact the advisor via phone, email or even text. Participants have the capability to “share” the app with others, which helps in the referral process. This functionality can be very valuable in word of mouth referral. Take for instance, one employee attended a participant meeting and during the workday, he talks to his fellow co-workers about it. He can now share the app with the participants that missed the meeting. The app also includes a link for the participant to access the website and view their personal account. When the advisor lives on someone’s smart phone, it is a constant reminder to them who you are and what you do. The ease of access to the advisor allows participants to contact the advisor with questions and then respond back to the participant very quickly.
BombBomb
The other strategy that we have found to help in participant engagement is personal video messaging. BombBomb is a simple video software program that allows the advisor to create a personal video message and send it to either a single participant or group of participants. The magic of BombBomb is the open rate of the emails. Very few participants have ever received a video email. Through this tool, the advisor can track how many participants opened and viewed the email. Our Firm did a study during the summer of 2016 and used several of our small 401k clients as test subjects. We sent out 300 individual video emails to participants. 135 of them opened the email, (45% open rate) and of the 135 people that opened the email, 45 of them watched the video (a 33% click-through rate). The message that we focused on with this video email was how increasing contributions could help their retirement. We had 10% of the participants that opened the email, request a contribution analysis and took some kind of action as it pertained to funding their plan. Interestingly enough, some participants watched the video four to six times! I know I am good looking, but not that good looking. I believe the uniqueness of the personal video message was the draw. We had several participants tell us that they were showing the video, (on their phone of course) to other employees. Once again, this gets the employees talking about their defined contribution plan.
Many advisors have “down time” during the week and to send out 30-50 short personal video messages only takes about 90 minutes. For small to midsize plans, you can hit an entire work force in an afternoon. This is much more effective than only catching a couple of participants in the break room at random times. Our video message to the participants is short and focused. We encourage them to contact us for an account review, we offer to run a contribution analysis and we give them a short educational point.
Our defined contribution business model is to get as close to the participant as possible in an easy and time efficient manner. I believe the use of a personal phone app and personal video message will become the norm for advisors in the future.
Christopher P. Englebert
Managing Director
Beirne Wealth Consulting Services, LLC
4905 W. Tilghman Street, Suite 210
Allentown, PA 18104
Direct: (610)-295-1083 / Fx: (610)-675-2650
Cell: (610)-428-8572
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