Three Ways Financial Advisors Can Educate Retirement Plan Participants

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In today’s retirement landscape, financial education is a hot topic—and for good reason. It’s necessary to foster responsible fiscal decisions, healthy savings habits, and overall retirement readiness among today’s consumers—and as a financial advisor, you understand this better than anyone. Yet, despite its crucial importance, American workers seem reluctant to approach the intimidating topic of financial literacy.

Just how bad are the financial literacy rates among today’s workforce? We’ve seen the stats, and they don’t look good. For starters, one-quarter of employed Americans decreased their retirement savings in 2022 because of inflation’s impact on their finances. The percentage of adults who find it difficult to make ends meet has jumped to almost 30 percent over the past year—and those with low financial literacy are more than four times more likely to have a hard time making ends meet1.

The need for financial education from a professional is clear, but what can financial advisors do to solve the literacy gap?

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How to teach financial literacy to clients

With so many of today’s workers feeling that they are behind in retirement saving, financial advisors and retirement plan sponsors alike can help ease some of their anxiety. Providing education about saving for retirement is a major key in helping today’s workers reach financial independence and retirement readiness, but it’s often easier said than done. Today’s employees are constantly reminded of the importance of socking away money for the future—yet many haven’t changed their saving behaviors. So, what gives? How can we cut through the clutter and have our message actually sink in? These three tactics may help:

  1. Don’t assume they know everything

While it may seem like second nature to financial professionals to know how a checking account works, how debt can be avoided, and how credit scores are calculated, many employees don’t have the knowledge base that’s needed to make responsible daily financial decisions. When meeting with a new client or plan participant for the first time, evaluate where their financial literacy efforts currently stand. Do they have debt? If so, what are they doing to pay off that debt? Do they know how to budget? Are they already saving for retirement? Analyzing their current understanding of everyday financial decisions will give you a starting point to work from.

Read more: How to Build Relationships with Clients as an Advisor

  1. Appeal to clients’ emotions

When teaching financial literacy, it’s important to do more than rattle off anxiety-inducing retirement statistics, specifically designed to scare participants into saving for their future. Changing the conversation is important—or participants may never fully listen to your message. We must convince workers that it’s imperative to their long-term wellness to begin saving for their future, and one of the best ways to do that is to find out what’s most important to them and appeal to their emotions.

For young people, priorities often include having time to focus on their passions and achieving a lifestyle that enables them to feel secure and comfortable. Following this train of thought, reminding young clients that debt from student loans or credit cards will realistically limit their ability to enjoy their passions in the future is likely a more powerful message than mindlessly reciting the benefits of budgeting. Additionally, if they don’t begin saving for retirement at an early age, the lifestyle security they crave may not become a reality when they’re closer to retirement.

For savers closer to retirement age, priorities are more likely to include protecting their nest egg and creating a creating a strategy for drawing income out of their retirement savings. Helping these clients understand Required Minimum Distributions and plan for Social Security benefits can go a long way in setting realistic financial expectations for retirement.

  1. Explain the long-term benefits of making smart financial decisions today

As a financial professional, you're already aware of the numerous benefits of financial literacy, but many Americans aren’t aware of just how beneficial it is to increase financial literacy efforts. Explaining the benefits clearly and concisely may open a client’s eyes to why they should care and adjust their financial behaviors.

Financial illiteracy is widespread, so holding a single educational session likely won’t yield long-lasting, successful results. The cure needs to fit the problem, right? With such an extensive issue, financial professionals, retirement plan sponsors, and retirement plan administrators alike must unite to enhance financial literacy rates and convince today’s workers to make financially responsible decisions today to benefit them tomorrow. It won’t be easy but advancing financially literacy among clients and retirement plan participants is the first step to a financially independent future and overall retirement readiness.


If you need any assistance along the way, we’re here to help. At Ascensus, we’ve been partnering with financial advisors to help their clients save for what matters for more than 40 years. To help more savers save more and achieve their retirement goals, we offer  a variety of tools and resources for advisors, plan sponsors, and participants alike. To learn more about our retirement plan options or how we partner with financial advisors to help their clients get there, contact our retirement specialists at 800-345-6363.



1 "Financial Well-being and Literacy in a High-Inflation Environment." TIAA Institute. Last accessed August 10, 2023.