Nearly two-thirds of defined contribution plan sponsors are using social media as a regular source of information for 401(k) plans and the providers that serve this market, according to new research.
Cogent Research published this finding in a summary of results from its 4th annual Retirement Planscape 2013 study. The report is based on a representative survey of over 1,500 DC plan sponsors across all plan sizes and industries.
While many providers continue to dedicate more time and money to more traditional forms of communication and outreach, such as e-mail or direct contact with an advisor or firm representative, plan sponsors are more often linking to plan providers through websites or blogs (39 percent), LinkedIn (24 percent), and Facebook (22 percent) to share or seek news and opinions related to 401(k) plans and providers.
“The prevalence of social media activity among DC plan sponsors is much higher than we anticipated,” says Linda York, Practice Director of Syndicated Research at Cogent Research. “These results indicate that a social media strategy, if it hasn’t already, should be an integral component of any provider’s overall communication plan.”
The use of social media for 401(k) information is highest among mid-sized plan sponsors, who represent plans with total assets of between $20 million and $100 million. Within this segment, 77 percent of plan sponsors utilize some form of social media for 401(k) informational purposes, with nearly half (47 percent) reporting regular use of provider websites or blogs.
LinkedIn is the second most popular channel among mid-sized plan sponsors, cited by 39 percent of respondents.
Cogent’s study finds the use of social media among 401(k) sponsors is lower among plans with higher asset levels, with just half of plan sponsors representing plans with greater than $100 million using social media for information related to 401(k) providers.
“The difference in social media usage by plan size points to the need for targeted communication strategies for each segment,” says York. “The larger, more established plans require a different level and type of outreach, often requiring more personal and direct communication.”