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Lisa Hronek Investment
IRA and 401(k) Updates for 2012
You still have until April 15th 2012 to contribute to your 2011 IRA accounts, but the government is already one step ahead and has announced some changes to the 2012 rules. This will not only affect how you save, it will also affect direct marketing communications in the near future. One change is the allowable limit one can contribute to a 401(k) account, which was increased by $500. The new cap will be $17,000 in 2012, up from $16,500 in 2011. However, the catch-up contribution, which is the extra amount individuals 50 and older can contribute, will remain $5,500. There was also an increase to IRA income limits. While the IRA contribution limit will remain $5,000 ($6,000 for individuals 50 and older), the income limits which provide some workers with a tax break for contributing to a traditional IRA will be a little more relaxed in 2012. Roth IRA income limits are also going to be more relaxed. Those eligible to contribute to a Roth IRA must make below $110,000, but this is up $3,000 from 2011.
These may seem like small changes, but when it comes to marketing communications, banks and investment companies will focus on any little change to draw attention to their IRA accounts and encourage contributions. We might not see a heavy emphasis on these changes until late next year, when mailings encouraging IRA contributions tend to be at their peak, but they will certainly be a popular subject.
New Green Marketing in Financial Services report from Mintel
Mintel’s Green Marketing in Financial Services report has just published. Be among the first to get your hands on new proprietary information regarding:
• Existing green marketing from financial services companies
• Marketing challenges posed by the overabundance of green messages and “greenwashing”
• Growth opportunities in socially responsible investing (SRI) investing
• Which customers are most receptive to green messages
• How technology is affecting green marketing
Green marketing has been around at least since the advent of Earth Day in 1970, but it’s picked up steam in recent years. Still, there are ample untapped opportunities for financial services companies.
Green “basics” for financial institutions now include paperless statements, electronic banking, green mortgages, green credit cards and other eco-friendly products and services. To the extent that financial services companies can support green efforts, they will be the companies of choice for an increasing number of consumers.
To learn more about this new report, contact your account manager. Not sure who that is or know you don’t have one? Email info@mintel.com or call 312-932-0600 to inquire about a single-copy purchase of the new Green Marketing in Financial Services report.
From the editor: Susan Menke, Behavioral Economist, Ph. D
For many financial institutions, pre-recession initiatives such as green marketing have taken a back seat as they have been dealing with the aftermath of the economic crisis. However, it may be time to pull out those tools again in order to help rebuild their image.
In a recent survey by Mintel for the report Green Marketing in Financial Services, April 2011, 72% of respondents said they ‘feel good about working with a financial services firm that invests in companies that are looking at eco-solutions.’
However, the data also shows a certain measure of cynicism, as almost half of respondents state that they believe that a company that claims to be green is just trying to promote a better image for itself.
Overcoming this cynicism is the key to a successful green marketing campaign that really stands out. But the danger lies in promoting green messaging in a way that only feeds this cynicism. In order for a green campaign to be effective, the consumer must feel like the company is truly sincere.
According to the study, the primary way that financial institutions can convince consumers that they are sincere is to promote internal initiatives. Slightly more than two-thirds of all respondents believe that this is the most important step a financial services company can take to become more environmentally friendly.
A significant number of consumers like green initiatives that also include an economic benefit for themselves. For instance, 50% of respondents would like to see financial companies offer environmentally friendly products such as energy saving light bulbs as incentives for new customers. Almost half (45%) would like to see FI’s provide capital to businesses that are developing new technologies and processes that are environmentally friendly.
Promoting paperless statements and online banking doesn’t necessarily resonate with consumers as much as making what consumers see as real sacrifices to show that the company is sincere in their green focus. Green marketing, if used properly and intelligently, can go a long way toward helping people see financial services companies in a better light.
Roadside Assistance…Is It A Good Thing??
Many P&C insurance carriers now offer some kind of Roadside Assistance Program — you get access to a 24/7 Nationwide Roadside Network in case you have a flat tire, dead battery, lockouts, empty gas tank, etc. Some have no annual fee. I found that auto insurers generally offer cheaper roadside plans than those of motor clubs, (i.e., Motor Clubs plans offer more full service plans for an annual charge — mine was $86/yr). I recently dropped my Motor Club policy once I realized that my Auto insurance policy will now offer Roadside assistance. My speculation is that a lot of you will do the same when your Auto carrier announces they now offer this, too. Why are carriers being so generous? Or are they?
Now for the $64 question: Will one of these roadside assistance claims eventually go on the insurers’ record? It’s not out of the question to be concerned that multiple claims for roadside assistance may cause the insurance company to raise rates or maybe even decide whether or not they want to retain a customer.
So I followed my hunch, researched my thoughts and it was confirmed. I found that car insurance companies report roadside assistance claims to ChoicePoint (a company in Georgia that collects claims information for the auto insurance industry) and using it too much may increase your rates, (see below).
“Using an insurance company’s roadside assistance or towing benefits too often could affect your rates or even your eligibility for coverage. Some auto insurers consider your calls for roadside assistance to be negatives, just like accident claims. One of the nation’s largest insurer says the use of roadside assistance is a very small factor in calculating rates or considering a driver’s insurability. Some insurers report roadside assistance calls made under their policies to ChoicePoint, an Alpharetta, GA. company that compiles claims information for the insurance industry. Other carriers say they report the information but don’t use it in their policy decisions. Another carrier says it doesn’t report usage by members of their Motor Club, but it does report towing claims made under its insurance policies” (Source: ConsumerReports.org)
As my mom always told me “nothing in life is free.” While these programs are great and can get you out of a bind if your car ever breaks down – be aware that there may be hidden risks/gaps in these programs. The consumer may pay by occurrence in some cases and may even pay the ultimate price of increased rates or drop of coverage if the utilization exceeds a certain level. My policy has this program and I’m grateful for it as we ran out of gas on a family trip recently. The Calvary came within 30 mins and we were be back on our way Disney to see Mickey and his friends…
Let me know your thoughts or comments…