Key Elements to Effective Virtual Meetings – Part IV

by | Mar 9, 2021 | Growing Advisors Business

What’s Your Next Step

When making key decisions, businesses must do a lot of research. Poor decisions can cost companies millions—or even push the company into bankruptcy. In contrast, good decisions can place a company well ahead of the competition. Having clear, understandable, and actionable information is the starting point of any good decision-making process. However, interesting information that may seem relevant could ultimately be unhelpful in making good decisions. Knowing the difference between key information and peripheral information can transform a good company into a great company.

These things are also true when advisors share information with 401(k) participants. There is no lack of information that can be presented. A quick Google search shows how advisors share information on plan design, loans, hardship options, market volatility, risk tolerance, investment diversity, asset allocation, plan sponsor goals, credentials, and financial wellness, and more. The list goes on and on. The sad reality is that the more material I have read online about participant education, the more confused I have become about what participant education should be.

Focusing on what is concrete to a participant is key when deciding what to include in a presentation. A lot of information needs to be left on the cutting floor. Concrete information includes how much a participant needs to contribute to a retirement plan. Most advisors talk about the participant’s contribution as a percentage of their income, but people don’t think that way. The information becomes concrete when you talk about it as a specific contribution value (e.g., “To potentially fund a successful retirement, you need to increase your contribution by 5%, which will reduce your take-home pay by $200 per month.”). In this way, a participant can clearly understand the action step.

I typically hear two objections from advisors. The first objection is that the contribution amount may be too much for the participant, creating disillusionment and failing to lead to action. The second objection is that participants feel cornered when the contribution amount is presented as the only solution. Indeed, if that were the only piece of data to be presented to a participant, I would completely agree.

These objections highlight that participants need additional information. Rather than just showing them what they need to be doing, including how they can take baby steps to increase their contribution today. Focus on how each increase in the contribution amount affects their take-home pay. Many participants are willing to sign up for smaller increases each year, but very few are able to make a large increase all at once.

Present additional options beyond just increasing the retirement contribution amount. What would they need to save if they retired a year later? What additional outside assets would they need if they had an old 401(k) or IRA? If they anticipate an inheritance later in life, how much additional funding would they need at retirement? Providing additional options allows the participants to feel like they have some control over their choices. At the same time, these approaches may help you uncover additional assets for the 401(k) plan.

Providing participants with important information about their plan is key to helping them move toward a successful retirement. When participants understand how much of their take-home pay they need to be contributing and the baby steps they can take to get to retirement, they can make informed decisions and increase their contributions to an appropriate level. Additionally, when advisors give them options other than just increasing the contribution amount, they have more control over how they get to a successful retirement and begin to own the decision-making process.

 


Key Elements to Effective Virtual Meetings – Articles in this Series
  1. Key Elements to Effective Virtual Meetings – Part 1 | The Basics
  2. Key Elements to Effective Virtual Meetings – Part 2 | Principles of Engagement
  3. Key Elements to Effective Virtual Meetings – Part 3 | You Are Here
  4. Key Elements to Effective Virtual Meetings – Part 4 | What’s Your Next Step

 

Ironmans and Financial Advisors

Recently I finished a Half Ironman Triathlon in St. George, Utah. It was a great race: swimming 1.2 miles, biking 56 miles, and then running the half-marathon, 13.1 miles. That’s 70.3 miles in total! The elevation gain of just over 4,400 feet had me contemplating quitting. At times, it felt like torture. But I finished, and for me, I finished well, just 26 seconds shy of six hours. I was thrilled! I exceeded my expectations on a very tough course.

Key Elements to Effective Virtual Meetings – Part III

A few years ago, while my oldest daughter was studying abroad in France, my wife visited her during spring break. Soon after arriving, they traveled to Africa to visit some family friends. They got very little sleep during their return red-eye flight, but when they landed, they picked up their rental car and headed out to see France. Their first aim was to find a place to pull over and get some rest.

Key Elements to Effective Virtual Meetings – Part II

Engagement with Americans in retirement readiness has never been easy. And COVID-19 restrictions have made many meetings virtual, which makes engagement even harder. That’s why it’s essential to follow the fundamental principles of engagement.

Key Elements to Effective Virtual Meetings

Every professional athlete practices the basics. We may think we have the basics down, but it is always important to practice. Here are seven items to focus on as you consider the basics of effective meetings.

Getting a Clear Picture of Retirement

The following blog is written for the client. A resource to help explain what an Integrated Benefit Analysis is and why they need it from their advisor.