Providing investors with valuable resources

June 19, 2024

man and woman with their financial professional

Where do people turn for trusted financial advice? How are they feeling about their retirement prospects? Research seems to indicate that a lot of people aren’t seeking financial guidance or feeling very confident about a comfortable retirement.

According to the Northwestern Mutual 2023 Planning & Progress Study, 66% of U.S. adults say their financial planning needs improvement, but just 37% work with a financial professional.1 That same survey found that 45% of adults who don’t work with a financial professional feel they will have enough money upon retirement.1 

Our 2023 Retirement Participant Education Survey revealed varying degrees of retirement confidence among age groups:

  • Early in career (ages 18-25): 15% know how much money they need to comfortably retire2
  • Middle of career (ages 36-55): 25% know how much money they need to comfortably retire2
  • Nearing retirement (ages 56-65+): 35% know how much money they need to comfortably retire2

There are plenty of theories about why investors don’t use financial professionals or may be insecure about their retirement goals. Here, we’ll offer speculation of our own and serve up some possible methods financial professionals can use to build better relationships.

Conversations that open doors

Could some people’s avoidance of financial professionals stem from certain stigmas? Could it be they believe they don’t have enough money to warrant the guidance available from a professional, or that a financial professional may not be interested in helping because of their lack of assets — or that financial professionals only have their financial interests at heart? 

Financial professionals can open doors by explaining how some of their greatest job satisfaction comes from seeing others enjoy financial freedom. 

A misperception that someone needs to earn six figures or be worth millions of dollars to work with a financial professional, on the other hand, may be more challenging to face. Such an attitude might dissuade those who live paycheck to paycheck from seeking the help they need, and it could also take more effort to convince them otherwise. Paying a portion of their hard-earned money to a financial professional may seem unrealistic to those who already struggle to make ends meet, and that’s a hurdle that likely won’t be easy to jump.

As for retirement plans — are workers simply too in the dark about what their plans entail and where they fit in? Do they have a “set it and forget it” attitude once their 401(k) is established?

These questions and scenarios may be difficult to overcome, but there are steps that financial professionals can take to help engage potential investors and plan participants to everyone’s benefit.

Tips to engage reluctant investors & participants

Building trust and finding ways to engage potential clients and retirement plan participants is the key to growing a book of business and helping workers prepare for their golden years.

Overcome stereotypes

Overcoming stereotypes begins with openness and honesty. Financial professionals, be transparent about any fee structures, your personal approach to providing financial services and the potential for market volatility. Plan sponsors, be forthright about forecasts and what benefits participants can reap while they give some of their earnings to their future selves. 

In both cases, have resources — including yourself — readily available and convenient for plan participants to access. Consistency is key in any communication. Determine a cadence for engagement and stick with it. Predictability is a good thing here.

Avoid financial jargon

Large cap funds, fiduciaries, consumer price index, bond markets … newer investors and first-time plan participants may have a hard time keeping up with “insider” terminology. Breaking down abstract concepts into plain English and creating a “no question is dumb” atmosphere can do a lot to put all participants at ease and engender trust.

Expand your social reach

No matter your personal feelings about social media, there’s no question that social platforms are where many consumers get their information. It’s also well known that much of that information may not be reputable. Building a social presence and providing a voice of reason, truth and practicality among the throngs of online disinformation can do a lot to boost your reputation as a trustworthy and accessible financial advocate.

Offer relevant education

There are numerous ways financial professionals can reach out to investors and plan participants. In addition to traditional emails and newsletters, consider hosting webinars and virtual meetings, or producing short, simple videos that cover a relevant topic in the news and its impact on investors’ lives. Post blog articles on your website, or simply share helpful third-party resources on your social channels that offer practical advice.

Remember, however, to always check for any rules surrounding social engagement and other communication methods with compliance departments and other regulations.

1Northwestern Mutual, Planning & Progress Study 2023, 2023

2TruStage. Help your employees reach their retirement goals: Findings from the 2023 participant education survey. 2023