The number of 401(k) participants who use Fidelity Investments' online benefits channel has exceeded the number of plan participants who phone the company's retirement representatives.
A survey Fidelity conducted in April of 1,116 Internet users who contacted Fidelity about their 401(k) plans, confirmed the company's impressions that the shift in customer habits had occurred, the company said.
"The Internet is now a mainstream account management channel for retirement savers," Fidelity said in a statement. "In fact, the volumes of contact 401(k) participants make through our online channel, NetBenefits, is exceeding the number of phone calls to retirement representatives."
The shift in the balance occurred for the first time last July, said Kathryn Hopkins, an executive vice president in the Fidelity Institutional Retirement Services Company in Marlborough, Mass.
"With the growth in usage of the Internet in the consumer world, we expected that to flow over into the work world," she said.
The increase in online contacts has accelerated tremendously over the last three years, she said. In 1996, 73 percent of the company's contacts with customers was through phone representatives, 27 percent was through automated phone service and less than one percent was through the Internet, she said. Last year, 57 percent were phone rep contacts, 12 percent were through automated phone service and 31 percent were through the Internet.
"Over the last year or so, we have seen the Web become a major delivery channel for us," Hopkins said. "Last July, our Web contacts began to exceed our rep contacts on a daily basis. By the end of the fourth quarter of last year, we had 4.2 million Web contacts."
More people are opting for Web contact because more people have access to the Web, Hopkins said. Virtually all six million participants serviced by Fidelity now have access to the Web, she said. That was not true a year ago.
The increased usage indicates that plan participants feel more comfortable with the Web than ever before, she said.
"They're checking their balances and looking at the performance of their funds," she said. "There is also a reasonable amount of people doing loans and withdrawals - things that they only used to be comfortable with talking to a live rep."
"While more and more participants are getting more and more comfortable doing routine transactions via the Web and doing data input directly into the system, it's freeing up the rep's time so he can have more robust conversations with participants," Hopkins said.
The Fidelity survey, conducted by Atlantic Marketing Research, also revealed that 46 percent of the respondents use the Internet to manage their personal finances.
Here is what the survey said those respondents are doing with their online time:
85 percent use the Internet to check stock quotes;
75 percent use it to check 401(k) balances;
49 percent use it to perform 401(k) transactions;
40 percent use it to trade in their mutual fund or brokerage accounts;
36 percent use it for calculators and other online tools for retirement planning; and
22 percent use it to pay their bills.
Seventy-six percent of those surveyed said they are online at least once a week and 50 percent of them gain access to the Internet from both home and work. Thirty-three percent go online exclusively from their homes and 16 percent connect exclusively from work.
"As we work with plan sponsors to provide innovative tools to assist with asset allocation strategies and expand the participant service features, we expect the online channel to continue its meteoric rise," Fidelity said in a statement.