Spectrem research shows that despite what sponsors believe, participants are interested in learning about additional products providers have to offer. Almost half say they would be open to information mailed directly to their home and almost one-third each say information enclosed with their statement or a link on the plan website is acceptable. Currently, 35% of plan participants are unaware of the other products their providers offer.

Plan sponsors must be made aware of this information and be made aware that you and they are partners working for the best interests of willing participants as well as the automatic enrollees from the PPA.

Today there are more than 41 million individuals who participate in a 401(k) plan of their own volition, and millions of others who will be auto-enrolled. Every one of these plan participants has or will have a relationship with a plan provider.

The recent efforts of plan providers to control costs by shifting service delivery to plan websites and voice response systems means that many of the participant interactions that do occur are handled on an impersonal basis. In addition, many plan sponsors strongly discourage any “marketing” efforts directed at their employees thinking to protect participants from unwanted or unnecessary sales pitches from providers. Unfortunately these efforts are misguided and inhibit the ability of plan providers to broaden and deepen the relationship they have with plan participants, and provide them with value-adding products and services.

Despite the fact that participants do want more information on products and services, providers recognize that in the normal process of plan turnover, job change and retirement there is a window of opportunity to establish relationships with plan participants and convert them into customers. Over three-quarters of plan participants who roll their balance into a personal IRA after a job change or retirement continue to select a firm other than the plan provider.

Efforts to cross-sell other products and services to plan participants have been even less successful than capturing rollover IRAs. Only 14% of participants own additional products or use other services offered by their plan provider. Eleven percent have considered or dealt with the provider in the past.

When ease and convenience are at a premium, plan providers must take advantage of every opportunity available to them to reach plan participants, especially the automatically enrolled PPA participants. Giving them multiple opportunities to become educated and involved in their own retirement planning and future financial health will, in the end, help build a solid relationship and engender more cross-selling opportunities.

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