Self-service investing, increased research options, self-directed IRAs and advances in communications make it extraordinarily easy for more people to invest money for retirement, family security and other personal goals such as starting a business or financing a college education. Unfortunately, many people found their retirement savings decimated during the 2008 financial crisis, and many lose money due to investing in fraudulent schemes. However, saving for the future still ranks as the best strategy for fighting inflation, building wealth, increasing retirement net worth and ensuring long-term financial security. Employers can encourage their employees to save and find safer investments with the following strategies:
Hosting Company Seminars, Fairs and Meetings on Investing and Saving
Investing seminars and meetings with third-party experts can educate your employees on investment best practices, retirement planning and the inherent risks that all investments share. However, it’s critical to review and monitor third-party advisers because some foster misleading information such as recommending early retirement, costly withdrawal strategies and high-risk-high-reward investments. Make sure that speakers at these events are qualified and have obtained approvals from their companies for their presentations. Review any handouts and presentation materials to identify any red flags for fraudulent practices or problematic content. FINRA.org, the website of the Financial Industry Regulatory Authority, publishes resources that help both employers and investors to research investments and spot warning signs of fraud or high-risk investments. FINRA also offers to review any seminar materials before you authorize third-party advisers to address your staff.
Posting Information About Investment Scams
Unfortunately, the give-and-take of investing generates scams, pyramid schemes, inflated claims and biased information from agents who receive sales commissions for the sales of certain investments. Posting alerts and warnings about fraudulent investments, suspected Ponzi schemes, Internet scams and known risks not only protects employees from these specific scams but also fosters greater caution when considering any investment.
Distributing Checklists and Instructions on How to Research Investments
Employers can also encourage safer investing by directly distributing checklists and information about how to research any investment. FINRA provides many resources that companies can use to educate your employees about securities firms, and you can also consult the Securities and Exchange Commission or your state regulator to obtain reliable information and materials.
Provide Employee Development Plans
Earning more disposable income is the essential first step before most people will consider investing, so companies can encourage sound investing by providing staff with tools to increase their earnings. Employers can encourage staff to move into more lucrative jobs by creating development plans, providing opportunities for education and cross-training, hosting virtual investment competitions and discussing personal and business development in one-on-one sessions to identify the skills each person has, review performance and recommend skills that he or she should learn.
Encouraging Staff to Take Advantage of Employer-Sponsored Retirement Plans
The most powerful way to persuade employees to invest wisely is by offering affordable retirement plans that automate saving and investing habits. If you’re a small-to-medium-sized business, you might have to look harder to find a reliable, affordable plan, and it’s important to consider long-standing principles of diversification, management practices and asset-allocation policies of any employer-sponsored retirement plan. Unfortunately, about half of American companies don’t offer retirement plans, and those that do declined from 61 percent to 53 percent between 1999 and 2011 according to a Forbes.com report. Offering your employees an easy way to invest encourages them to learn more about investing and to develop sounder financial strategies.
The U.S. government runs a website on savings and investments at usa.gov. Encouraging your employees to educate themselves on investments and savings is a good way to begin the process of finding sound investment opportunities.