Grow Your Business

Striking While the Iron is Hot

By Tom Foster

Blacksmiths know that the best way to forge a piece of hot metal to the shape they desire is to quickly strike it before it cools. It’s often the same in the world of retirement plans.

The latest Economist/YouGov Poll reports that consumers are expressing more optimism about the state of the economy than they have in several years. Nearly one in three poll respondents (32 percent) said the economy is getting better and only 22 percent said it’s getting worse, YouGov reports.1

The latest optimism behooves financial advisors who support retirement plans to seize the moment by working with employers to sponsor educational and enrollment meetings. Workers may be more likely to take proactive steps to improve their financial futures by saving or saving more in their employer’s 401(k) plan if they feel confident about their financial future -- or at least feel confident about the current state of the economy.

But advisors must strike while the iron is hot. We live in a volatile world and unforeseen events can scare off seasoned investors -- never mind the uninitiated retirement saver.

Employers are in your corner. Four out of five employers (80 percent) said they want their advisor to explain the company’s retirement plan benefits and options to employees, according to the 2016 MassMutual Winning Combination study.2

Get started by checking with your plan provider or recordkeeper about what support may be available for your educational initiatives. The most effective educational programs take a multipronged approach, connecting with retirement savers in a variety of venues and mediums.

Some people favor a personal touch. That’s why you want to work with a recordkeeper that fields an army of educational specialists. These highly trained men and women fan out across the country, connecting with thousands of participants in group meetings and one-on-one sessions, answering questions and helping to guide savers to their desired destination. Their single-minded mission is to educate plan participants and to facilitate enrollment.

Advisors can work separately or in tandem with these specialists. Besides educating participants on retirement savings and investment strategies, some specialists can also expand their lessons to include financial wellness, helping participants better understand their overall financial needs and priorities.

Admittedly, the educational specialists cannot be on site every day. That’s why participants should have access to a call center with professionals who are well-versed in retirement savings and investment strategies. Call center specialists should be highly trained and able to lend a guiding hand when needed and reinforce positive behaviors.

But not all education specialists and call centers are equal. Like blacksmiths, some are more skilled at molding and modifying, especially when it comes to behaviors.

So how do you know which retirement plan providers have the best education specialists or the most effective education programs? Ask your recordkeeper to quantify participant behavioral changes (increased savings rates, improved investment decisions, consolidation of assets from multiple plans) that result because of an interaction with an education specialist or call center rep. You want more than just good service; you want proof that the recordkeeper is successfully promoting and enabling retirement readiness by employing the best educational specialists and call center representatives.

Meanwhile, some people prefer to access information online, at least some of the time. That means your recordkeeper should provide participants with access to an easily navigable website with the latest tools and educational materials.

Participants need sophisticated yet easy-to-use tools to gauge their relative state of retirement readiness. For example, some tools incorporate Monte Carlo-modeling capabilities that can ascertain a participant’s probabilities of reaching his or her retirement goals given their current savings strategies. Some tools relate retirement readiness to monthly income, some describe readiness as progress towards a financial wellness goal, some do both.

Participants also need direction and guidance, especially if they are not on target. The latest robo advisors may help providing the bots can project what savings rates and asset allocations participants need to reach their retirement goals based on current and alternate savings rates and asset allocations. Before you turn the ‘bots loose, though, make sure you put them through their paces to determine if they work as intended.

Increasingly, recordkeepers are offering access to retirement plan tools and information through mobile apps. While not everyone is comfortable using an app for financial transactions, an increasing number of plan participants – think Millennials for starters – turn to apps first and foremost.

While education is important, so is motivation. Recordkeepers can help through targeted campaigns to encourage savings, delivering messages that connect with participants on both a demographic as well as an attitudinal basis. The more personalized the message, the more likely it is to hit home.

Advisors who can muster a wide range of educational resources may have an edge in the marketplace and drive real results for retirement readiness. But the key is to strike while the iron is hot and right now it’s glowing red for retirement savings.


E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual).


141% of Americans approve of Trump’s handling of the economy,

 22016 Winning Combination Study, What retirement plan sponsors value most from financial advisors, January 2016,