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Social Media and 401k Participants

    
According to recent studies released by the Spectrem Group, the use of social media by 401k and defined contribution plan participants is continuing to increase.

The utilization of Facebook, Twitter and LinkedIn is becoming increasingly common. While historically a tool of younger investors, even older investors are beginning to use these mediums as communication tools. Some key findings from the Spectrem Group study, Use of Social Media by 401k Plan Participants, include:

  • More than a quarter of plan participants today rely more on social media for communication than on traditional channels such as the telephone.
  • Ten percent of plan participants intend on increasing their usage of LinkedIn in the near future and eight percent of participants will increase their time on Facebook.
  • Approximately thirteen percent of defined contribution plan participants would look at how much an advisor uses social media if they were to choose a financial advisor on their own.
  • Almost three quarters of defined contribution plan participants are currently using Facebook to some extent.
  • While younger plan participants are the most likely to use Facebook, older participants are also frequent visitors to Facebook.
  • About half of plan participants use LinkedIn.

The boost in usage means that plan sponsors should consider implementing a social media strategy. Consider the following when developing an approach:

  • Does your firm currently have a Facebook communication strategy?
  • Do older participants seek different types of information from social media channels?
  • Does your firm need a LinkedIn strategy or not? Are participants using Twitter? Google Plus?
  • What types of information are participants seeking through social media?
  • How should you change your employee communication strategies to effectively use these channels?
  • How will you effectively monitor the use of third-party sites such as Facebook, Twitter and LinkedIn?
  • Should you consider the appropriateness of some type of content preapproval requirements?
  • Who will be responsible for your social media strategy?
  • Are there any compliance or legal issues that need to be addressed?

Rick Meigs, President, 401khelpcenter.com


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