As longer life spans and a difficult economy make financial planning that much harder, education is that much more important, according to a white paper by Corporate Insight.
The burden for educating investors falls mainly on financial services firms, according to Corporate Insight, and firms are responding in innovative ways that incorporate multimedia and social media.
Corporate Insight surveyed both insurers and retirement plan providers for the white paper and found they were similarly invested in educating consumers.
Video was one of the most popular methods of educating consumers, especially among annuity firms, according to the report. A video can provide consumers with an overview of a particular product before they dive into prospectuses and fact sheets.
The paper noted that these resources should be prominent and easy to find. Seventy percent of firms surveyed said their videos could be accessed from a “Video” or “Multimedia Resources” link in the main navigation bar on their website.
Half of the survey respondents offer annuity-related videos to consumers, and half offer them on their advisor sites. The most effective videos are brief and organized into “chapters,” and incorporate audio and visual aids, narration, and charts and graphs that compare products and features.
The report noted that while there is little distinction between how insurers and retirement plan providers display educational videos, plan providers typically offer a wider range of content like market updates.
Insurers are using social media in multiple ways after lagging behind firms in the banking, brokerage and credit card industries. Social media campaigns serve to educate consumers as well as promote the brand. Polls and quizzes are popular, as are cross-posts of videos on a firm’s YouTube channel.
Retirement plan providers, on the other hand, are less likely to use social media sites for education. “While social media icons have been implemented within the static footer of participant sites, leading to the general social media pages of firms, little else has been developed,” according to the paper.
The paper noted, though, that retirement plans are chosen exclusively by the sponsor, making large social media campaigns unnecessary.
Similarly, insurers have adopted online games as a way to impart financial education in an engaging way, but plan providers have so far avoided it. Just 17% of those surveyed offered games. Furthermore, “None of the games we’ve seen are specifically geared toward retirement-related education, and, instead, focus on engaging clients on more general themes,” according to the paper.
Product pages that display product information, including historical returns, prices and performance reports in an easily readable format, are another essential way to provide education on an insurer’s offerings, the paper found.
Retirement plan providers frequently employ presentations as an educational tool. These are useful when a short video would be inadequate.