Spaced repetition erodes resistance.

I am not certain Sir Isaac Newton was thinking of capital accumulation plan (CAP) members when he came up with his laws of motion in 1687, but they certainly are apt. Briefly, and with apologies to any physicists, the first law, also known as The Law of Inertia, states, “A physical body will remain at rest, or continue to move at a constant velocity, unless acted upon by a net force.” Most members upon enrolling in a CAP tend to do nothing or very little (remain at rest) as time goes by, unless continually prompted (action of a net force) by the plan sponsor or service provider. Spaced repetition can be that force, constantly reinforcing the messages that plan members need to absorb in order to secure their plan for life.

Recent research has helped us define the CAP member—understand who they are and how they feel. For the past two years, Benefits Canada has conducted extensive research among these members and has come up with some findings that are worthy of note. Interestingly, 63% of CAP members read their plan statements (it’s scary to think what the other 27% do), yet only 34% of members have increased their contributions and only 29% rebalanced their assets. Do plan members not get it? Are they paralyzed into inaction? Or do they just not know what to do?

The 2007 LIMRA survey, The Reluctant Consumer Yo-Yo, provides us with some of the answers. They have defined the financial consumer as an individual who is reactive rather than proactive—they need a push and are not likely to act on their own. Many of them do not understand the holistic relationship between healthcare, retirement and insurance, which makes it difficult for them to connect the dots and develop an overall retirement plan. The good news is that they understand the importance of financial literacy, but are unsure where to get the information—which means that they will listen if they get the right message. And finally, they feel overwhelmed by all of the choices out there, and are unsure where to turn for help.

Essentially, plan members want easily digested information that is relevant to their unique needs and particular life stage—education that comes to them when they are ready to learn, without a sales hook at the end. They want our help in enrolling in the plan (choosing investments) and staying on track (monitoring their investments and understanding income gaps), and they need help to make proactive decisions before it’s too late. Spaced repetition provides the opportunity to intersect the delivery of the message at a life stage or life event when the member is ready to listen.

Many of the tools and information sources are already in place; it’s a matter of ensuring that they are all working together to support the same message for the member. Interactive Web content, seminars, statements, retirement checkups and live support from qualified professionals who can offer relevant advice should all be prompting the member regularly to take action.

And if the member is not going to take action, then it’s a matter of taking action for them. For example, why not ensure that the member’s assets are rebalanced every statement cycle so that they are always invested according to their particular investor profile?

Spacing the message—repeating and reinforcing the desired outcome and delivering relevant content specific to their particular lifecycle—can help members plan for life beyond work. Plan sponsors and their providers need to act as the external force that members need to overcome their natural preference for procrastination.

Teresa Morgan is the director, member services and marketing, group savings and retirement at Standard Life.

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© Copyright 2008 Rogers Publishing Ltd. A shorter version of this article first appeared in the April 2008 edition of BENEFITS CANADA magazine.


Copyright © 2018 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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