As the U.S. Department of Labor considers its next step on a proposal issued in the autumn that would allow retirement plan sponsors to deliver their plan disclosures online to 60 million American plan participants, a new survey finds that not all investors want to receive their investment information electronically.
In fact, only about four in 10 investors (38%) say they prefer to receive communications from their plan providers exclusively via email or an online portal, according to the Secure Retirement Institute (formerly LIMRA SRI), which surveyed 721 Americans who save in a retirement plan to find out how they preferred to get their retirement plan information.
In contrast, 26% of investors still prefer to receive only paper copies of their retirement plan communications, while 32% want to receive both electronic and hard copies of retirement plan statements and documents, according to ““Getting Retirement Communications Right: Understanding Consumer Behavior and Preferences.” Four percent of investors said they have no preference.
The primary reason for preferring paper communications is recordkeeping (61%).
More than a third (34%) also say paper communications are easier to read and they are more likely to read the communications in paper form.
The results provide a “know-your-customer” reality check for investment advisors and broker-dealers, as they work toward creating the new disclosures that Regulation Best Interest will require when it goes into effect June 30. The takeaway from this survey is simple: Just because you can deliver disclosures online doesn’t mean that all clients want that.
Security risk was cited by 3 in 10 consumers as the reason they prefer paper copies of their investment statements. Interestingly, millennials and adult Gen Z consumers are the most wary of emailed investment statements being stolen online, the survey found.
For those who favor electronic communications, more than half (54%) say it is because they can access the information from anywhere in the world where they have internet access.
Perhaps surprisingly, the desire for online delivery of their investment information increases with age. Forty two percent of Gen Z/millennials favor electronic delivery because of ease of access, followed by 54% of Gen Xers and 68% of baby boomers.
Forty-seven percent of investors say it is easier for recordkeeping and 45% believe electronic communications are more environmentally friendly.
Being environmentally friendly was especially appealing to women, those with more than $100,000 in household assets, and those who are currently working and not retired, SRI found.
“Given the cost savings, it would be advantageous for plan sponsors and recordkeepers to persuade their workers to accept electronic communications,” SRI said in a blog.