401(k) plan participants want a more personal, authentic connection with financial advisors. Such connections could include a common background, language, shared values, or other factors. How can advisors find and foster deeper connections?
This question was posed in a recent BenefitsPro article, penned by Emilio Vela, Director of Participant Engagement at Pensionmark Financial Group. The article explored why 401(k) plan participants want a human connection with their financial advisor now more than ever and how advisors can help create stronger, more personal relationships.
Mr. Vela noted, “COVID-19 has had a profound effect on how people view work, their future and how they want to live their lives. Other factors include the influence of technology, the ongoing generational shift that’s happening in the workplace, as well as changing norms about everything from environmental and social issues to mental health and how these things are all interconnected.”
Plus, as Jean Edelman, wife of long-time financial advisor and radio host, Ric Edelman, says, “Personal finance is more personal than finance.” As Mr. Vela put it, “Financial planning has always been a very personal endeavor that’s intertwined with so many other aspects of a person’s life, and which requires trust. What’s changed is that how that trust is built now goes beyond certifications or years of experience—which is why some people are listening to TikTok influencers instead of financial professionals.”
To gain that trust and build personal connections, financial advisors should focus on the following:
- Recognize diversity. Everyone needs help with their finances, and advisors should work to cultivate a culture that meets and understands the varying needs of diverse groups. That means creating a “safe space” for participants by practicing active listening and empathy, according to Mr. Vela. Additionally, ensure that every member of your team who engages with participants has access to information they need to offer accurate, personalized guidance. This helps build credibility and trust with clients. And make sure to keep clients’ personal information safe, including having proper cybersecurity measures and maintaining absolute confidentiality.
- Use the right messaging. In other words, literally, “speak your clients’ language.” From hiring multi-lingual advisors to noting clients’ pronouns, language preferences, and other personalization, ensure that plan participants feel welcomed and included and that they can see themselves reflected in your firm’s image.
- Communicate across multiple channels. According to Mr. Vela, “There can be generational divides and unique personal preferences driving how individual participants want to receive or access information, and it’s important to make sure to offer multi-channel communication to respect those preferences.” Some participants prefer email and texting, while others may never check their email messages. Give clients an easy way to indicate these preferences when they begin working with you. Additionally, make it simple for them to accomplish tasks like scheduling appointments and accessing resources on your website at their convenience.
- Foster engagement. The SECURE 2.0 Act was designed to make it easier for employers to offer retirement plan benefits and for employees to increase their savings. Leverage traditional means of boosting retirement plan participation and engagement, like auto enrollment, in combination with newer methods introduced in SECURE 2.0, such as providing resources and benefits to improve financial wellness.
Mr. Vela advocates that advisors take a multi-pronged approach to successfully cultivate personal connections with retirement plan participants. Focusing on diversity and building tools participants need to engage with financial wellness benefits helps advisors better understand individuals’ specific requirements when it comes to their financial goals. According to Mr. Vela, “When deeper connections are formed, they allow for better planning, better outcomes and better long-term relationships—and that’s exactly what [financial] wellness is all about.”
