How Social Media Influences Plan Sponsors’ Participant Communications

As members of Generation Z start their first jobs and are enrolled into workplace retirement plans, they often turn to social media to understand how retirement investing works.

More information than ever before is available, but sifting through all that content to find reliable and relatable information can be a challenge.

“Although Gen Z is thought of as kind of the most tech-advanced generation … they’re still very new to the workforce. I think that’s important to remember,” says Julia Stati, a customer engagement specialist at Sentinel Group, a full-service employee benefits firm.

Plan sponsors are uniquely positioned to be that trusted information source for younger investors. Reaching this generation starts by delivering short, concise, easy-to-understand messages, including videos, infographics and blog posts. Young workers are also looking for more than retirement-savings topics and are seeking to learn personal-finance basics, such as dealing with student debt, using credit cards wisely and juggling competing savings goals.

Customization is key to delivering this information, and recordkeepers can work with employers to tailor subject matter important to their participants, using milestone events such as birthdays or hiring dates to nudge good investing behavior.

Social Media for Research

Kirsten Hunter Peterson, vice president of thought leadership at Fidelity, says it is not surprising to see this generation use social media for research, since it is convenient, accessible and what they use in their personal lives to research other information.

Because of that, firms such as Fidelity are reinventing how they deliver financial education, especially for younger investors. Hunter Peterson says Fidelity is seeing engagement grow quickly on platforms such as TikTok and Instagram, especially short videos and one-page infographics. Bite-sized content can open the door for further engagement if users are interested in learning more.

“In both of those cases, or with any shorter media, it’s always really helpful if you can provide kind of a [link] into something that is more robust and more explanatory,” she says.

Single-topic, shorter videos get better educational results than blending multiple topics, says Steve Jenks, chief marketing officer at Empower. He adds that most people’s attention spans are limited and those watching the videos generally aren’t experienced investors, so giving too much information at once can be overwhelming.

Tori Dunlap, founder of Her First $100K and a paid contributor to Empower’s The Currency educational web site, has 2.3 million followers on TikTok and says people who use social media to find financial information are looking for someone trustworthy. They are using platforms such as TikTok or YouTube as search engines, rather than starting with a site such as Google.

Once they find someone to trust, they will follow that person to do deeper research. “That’s where the blog content comes up. That’s where a course, or something that’s more educational beyond a 60-second video,” fits in, she says. “People aren’t turning to financial advisers; they’re turning to the internet.”  

Topics of Interest

For years, plan sponsors have limited financial education to retirement saving, but sources interviewed say plan participants are hungry for more personal finance information. Budgeting, credit-card usage and paying off student debt are popular subjects, along with long-time money questions such as how to juggle multiple savings goals.

Farnaz Maters, vice president and chief marketing officer for retirement and income solutions at Principal, says the industry has not made it easy for new plan participants to understand investing, but that needs to change.

“The more that we can simplify it and make sure that it is consumable and it’s [available] in a way that can be driving engagement, the more impact we’re going to have,” she says.

But sometimes educational offerings try to do too much at once, she adds. New investors seek consumer information to learn at their own pace, often preferring to start in smaller chunks. As plan sponsors think about creating information, they should consider tactics and the specific problem they’re trying to address to make it easier for plan participants to gain knowledge.

Participants “want it more to be self-service, like, ‘I’m at Point 0. Tell me about Step 1. Don’t tell me about Steps 1 through 10 at once,’” says Maters. “It makes our jobs a little bit more difficult, because you’ve got to be really thoughtful about the different cohorts or segments that you’re serving [and] where they are in their journey.”

Empower launched its The Currency site to make money topics more approachable, with the idea of looking at money across life, work and play, Jenks says. Information is updated weekly. The content is very tightly tied to the same things people are reading or seeing on social media, he says, and the site offers a mix of fixed messaging and dynamic content. Dynamic content  personalizes content to the anticipated interests of the user; an example is Amazon’s recommendation engine. Dynamic content is more effective, since it is intended to provide information the user is seeking and that reflects the user’s current situation, Jenks adds.

Every generation has had its money struggles. Successful financial education should empathetically reflect Gen Z’s issues, Dunlap says. She feels older personal finance speakers who have been critical of the savings habits of Millennials and Gen Z do not recognize the systemic issues Gen Z is facing, such as student debt, stagnating minimum wage, spiraling rent prices and home prices out of reach for the average person, she says.

Those are some of the immediate money concerns younger people face, and Dunlap says many also feel anxiety about longer-term issues like climate change. “People I talked to are like, ‘I don’t even know if the Earth will be around by the time I’m retiring,’” Dunlap says.

Hunter Peterson actually counters the conventional wisdom that Gen Z isn’t saving, pointing to Fidelity’s data showing that Gen Z participation in workplace plans is in line with other generations, with a total savings rate of 10.2% for 401(k)s and 7.4% in 403(b)s.

For those are not yet saving regularly, Jenks says Empower’s research shows that many people don’t save because they are anxious about their overall financial situation. Demystifying personal finance can help new investors figure out how to earmark money to short-term needs while also saving for retirement.

In creating content to connect with younger employees, tone is important: “Don’t patronize them, don’t talk down to them, don’t be condescending. Give them a lot of grace. If they’re coming to you at all, they’ve already overcome this huge emotional feeling of shame,” Dunlap says. “It’s really important, especially for people under 40, to feel safe, to feel heard and to know that they’re going to get quality information in a way will not make them feel terrible.”

How to Customize Communication

Maters says when it comes to customizing topics and communications, recordkeepers should work in partnership with employers to build engagement and savings rates. “Employers know more about the culture of their organization [and] how their employees consume information,” she says.

Personalizing information at milestones and life events is an easy way to reach out to participants, according to Matt Zokai, director of retirement solutions at Avantax, a tax-focused investment planning firm, who has worked on both the recordkeeper and adviser sides. He says employers, plan advisers and recordkeepers have access to participant data, so they can look at age, account balances and proximity to retirement and use that to create a personalized experience.

While there are automated methods to gather information such as account balances, work history or what topics plan participants click on, Stati says plan sponsors should query plan participants directly. “What topics, what life events [do] they see on their horizon?” Stati says. “That’s one way to capture topics, and then also ask, ‘How do they want to learn? What method do they want?’”

Megan Yost, an engagement strategist at Segal Benz, a communications and marketing agency specializing in employee benefits communication, says plan sponsors should consider the demographics of their target audience when communicating to participants: not just age, but the type of work, too. For example, do plan participants sit at a desk in a central location, do they work at home or do they perhaps drive a truck? Are they accessible during the day? All of those factors should be considered for both the content itself and how it is delivered.

While engagement and communication strategy often focus on using recordkeeping platforms, there are other ways plan sponsors can reach participants. Zokai says Avantax has seen success using compliance-approved communications texting tools and reaching out to participants through push notifications on phones. He says the most successful communications forms have been pre-scheduled texts, emails and short videos personalized to a participant’s demographic or pertaining to a topic in which the participant has expressed interest.

Having a robust and easy-to-understand digital component to a workplace plan is important, but Dunlap says one of the best ways to communicate continues to be in-person education.

“Honestly, the best way that I’ve seen is literally, someone who is older at the company sitting down with the 22-year-old and just being like, ‘Hi. So I know saving for retirement doesn’t sound fun, but put 2% or 3% of your paycheck away, because then you get the match,” she says.