Employee Education Can Be More
than an Orientation Session

The Conflict

The financial crisis and resulting market downturn that began in late 2007 created fear and unrest among retirement plan participants. So much so that many individual 401(k) investors considered cashing out their investments and carrying large cash positions, believing this a prudent hedge against losses. This strategy, known as ‘emotional selling’, can hamper long-term investment returns.

The MGO Solution

MGO reached out to plan sponsors via telephone or e-mail, making MGO staff available to help educate employees about the pros and cons of emotional selling. These ‘emergency’ individual and group employee meetings focused on educating participants on the current state of the economy and MGO’s economic forecast for the year ahead. Additionally, MGO shared insight, tips and tools for managing assets in a volatile market.

The Result

More than 50 plan sponsors accepted MGO’s offer to conduct emergency meetings with over 1,500 plan participants attending. Armed with more information these employees were better able to make informed decisions as to the management of their 401(k) assets during a volatile market time period.

By explaining the state of the economy to participants in a straightforward manner some the ‘fear of the unknown’ was alleviated, helping participants to focus on long-term strategies rather than short-term rebalancing. The result is a group of informed plan participants investing in a manner that brings comfort for the long term in any market environment.