When advisors communicate about retirement, study says ‘use your words’

When advisors communicating about retirement, study says "use your words."

By Ayo Mseka

While there is no best single way to effectively speak to Americans about retirement, the language used in retirement communications is often a more dependable way to communicate than imagery, according to research by Capital Group.

"This research makes clear that both the language and imagery we use in retirement communications do matter in making an impact on people and inspiring them to take action," said Toni Brown, head of Retirement Strategy at Capital Group.

"As an industry, we need to understand how both are working together, and connecting emotionally across audiences, so that we can better educate, guide and support Americans on their journey to retirement," Brown said.

No 'one-size-fits-all approach'

The findings underscore that there is not a one-size-fits-all approach to retirement communications, the survey said. People carry a strong sense of individuality and are attracted to messaging that recognizes and addresses their specific needs.

The audience's age, for example, strongly influences preferences for both written messages and imagery.

Smarter/better messages, for example phrases like "saving smarter for retirement," appeal the most to Gen X investors who want to know that their money is working for them to the greatest extent possible. On the other hand, boomers can find such language patronizing or condescending.
Planning imagery and language such as "plan the retirement you deserve," appeal more to millennials, who are just getting started with saving and have plenty of time to prepare for retirement.
Imagery portraying enjoyment and transition rates higher with boomers than with their younger counterparts, since retirement may be closer at hand and offers less speculation for them.

“The research revealed that people can have messy, mixed and deeply personal emotions about retirement.”Toni Brown, head of Retirement Strategy, Capital Group

"The research revealed that people can have messy, mixed and deeply personal emotions about retirement," said Brown. "At the same time, investors seem to want to know the pathway to retirement is doable, worth it, and in their control.

When it comes to language, straightforward, factual statements about successful outcomes resonate most." For example:

Outcome-oriented messages, such as "knowing that it's possible to live the life I want in retirement," are more effective than messages about getting started and learning. Respondents also preferred factual statements to product-related ones.
Planning statements that position the individual at the center of the discussion around retirement, and enjoyment messages, are more appealing and likely to encourage action than negative language, such as warnings of potential mistakes, or prevention messages.
"One of the most common mistakes" was the least preferred message, with 58% of respondents reporting that they did not associate it with feeling more confident and 55% saying they did not associate it with wanting to save more.

Most appealing imagery

With imagery, the study found that those showing people being supportive and images of planning to be the most appealing (50% and 47%, respectively).

The least preferred images fell into the prevention category – for example, images in which older individuals were portrayed receiving health care.

In addition, the research revealed how difficult it is for an image to elicit a uniform reaction, with a wide range of responses to each image. Also, respondents were not especially quick in their reactions, compared to their reactions to language. Many had to stop and think longer, the survey said.

Similar surveys conducted in other industries, for example to gauge consumer product preference, often generate rapid and confident reactions. Slower reaction times may underscore the discomfort or uncertainty that many people feel about retirement and/or investing, the survey said.

What consumers want in retirement communications
So what do consumers want to see more of in their retirement communications? According to the survey, participants said that overall, they want:

Diversity of race and ethnicity, as well as life stage and work setting, including retired singles, younger people and those working in non-traditional jobs.
Portraits of retirement as a physically active time, with a broader depiction of retirement activities.
Images of technology. Universally, respondents liked seeing the technology they use in their daily lives, such as tablets and smartphones.
People actively working in retirement, since retirees are increasingly choosing (or needing) to pursue part-time work in retirement.

Capital Group partnered with the market research firm Escalent in Q4 2021 to survey and interview 2,451 American adults in various employment situations. These included advised vs. self-directed investors and a mix of age, gender, and race/ethnicity. All qualified as investors by having at least one account, such as an IRA, an employer- sponsored retirement account, a brokerage account, or a digital investment account.

The study also included an audit of hundreds of written messages and images that comprise the current retirement landscape, drawn from financial firms' websites, social media and marketing content, followed by an analysis of participants' feelings and reactions to those communications.

In addition, the study included an audit of 590 images and 691 written messages from 33 companies across multiple platforms, including financial firms' websites, social media, blogs, and marketing content.

For additional information and the full report, click here.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].