The NAOI 
401(k) Participant Empowerment Program

The NAOI works with hundreds of individual investors every year. They take our courses online and ask questions. They attend our courses presented in the college classroom and they ask questions. An overwhelming number of these questions are about their company's 401(k) Plans. They just don't understand these plans and are afraid to use them. As a result far too many don't participate in this incredible benefit. This is such a prevalent problem that we have created a special employee education and empowerment program for companies that offer 401(k) Plans. A brief overview is provided on this page. Contact us at info@naoi.org for more details.

What Many Companies Are Doing Wrong

The benefits of participating in a 401(k) plan, particularly with employer matching contributions, are overwhelming. Yet far too may individuals don't participate. Why? Here is what our students are telling us:. 

• Employers Are Providing 401(k) "Information" Not "Education".  This is the most common complaint. Employees receive brochures, attend meetings, are given access to Web-based material, etc. All of this is well and good. BUT "information" is not "education" and "reading" is not "learning". To be comfortable investing their money in a 401(k) Plan employees must be totally confident that they understand not only the Plan but also basic investing in general. And such confidence only comes from a comprehensive and professionally designed education offering - not from information brochures or corporate memos. Serious education is what the NAOI Empowerment Program provides and it is described below on this page.  
  
  
• The Information Is Too Generic. It Is Not Personalized. According to our surveys, the information employees receive related to their Plan is too generic. Each individual employee has a unique financial profile, goals and challenges. They need personalized attention. If they don't get it, many don't participate. The NAOI Empowerment Program enables companies to treat each employee as a unique individual. 
  
  
• The 401(k) Information Provided Is "Passive". Learning does not occur in a passive environment. True education requires that students be actively involved in the learning process. The NAOI Empowerment Program requires students to use calculators, fill in worksheets and pass tests. This involvement gives employees/students the confidence they need to participate fully in a 401(k) Plan.
  
  
• No Investment Analysis Tools. After understanding and deciding to participate in a 401(k) Plan, employees must then choose their investments. Some of our students tell us that they are offered the services of financial advisors. Others tell us that they are just given a short description of their investment choices. In neither of these cases does the employee have a sense of confidence that they are making appropriate choices. NAOI input from numerous surveys tells us that employees need to be able to perform their own analysis of the investment choices presented. Most 401(k) information programs don't show employees how to perform this analysis. The NAOI Empowerment Program does.

As an employer you need to recognize and address the issues presented above. The NAOI 401(k) Participant Empowerment Program enables you to do so. 

The NAOI 401(k) Participant Empowerment Program 

The NAOI has listened to the public. We know that many are uncertain, confused and afraid when it comes to placing their hard-earned money in a 401(k) Plan. They won't participate if they don't understand the Plan. Based on this input and to solve this problem we have created the NAOI 401(k) Participant Empowerment Program. Components of this Program are described briefly below. 

The Education/Action Modules

Central to our Empowerment Program are four education/action modules that are presented to your employees in a multimedia format. They are available in both an online and hardcopy format. Following is a short description of each.

• Investing Basics Module. Far too many companies assume that their employees understand the basic principles of investing. Most do not. We start by providing a short course on Investing Basics.
  
  
• Personal Planning Module. Each employee is an individual with a unique financial profile, unique goals and unique challenges. Each deserves special treatment. This Planning module enables each student to use online calculators and worksheets to define their personal financial situation, risk tolerance and how much money they will need for a comfortable retirement. After completing this module students will have created their own unique Financial Plan. This document will then guide their investment choices and give them confidence to participate in your 401(k) Plan. Note that this is also a plan that advisors can utilize to make appropriate recommendations for each individual.
  
  
• Your 401(k) Plan Description Module. With a basic foundation of investing knowledge and a Financial Plan in place, now - and only now - is the employee ready to fully understand and appreciate the 401(k) Plan you are offering. The purpose of this module is to explain it in full. Perhaps you have this module already written. If not the NAOI can write it for you.
  
  
• Investor Empowerment Module. There is yet one more step in the process. 401(k) participants must choose their investments. The Financial Plan they created in the Personal Planning module will guide their selections. Yet the public tells us they need more. They need to know how to use readily available Web-based resources to analyze their choices. The Investor Empowerment Module does just this drawing on the NAOI's unmatched knowledge of investment analysis resources available on the Web. A small amount of objective research, performed by the employee, will dispel any suspicions that "bad" investments are being forced on them. Investor psychology is in full play here.

Graduates of all of these modules will have the knowledge, incentive and confidence to take full advantage of your 401(k) offering. But how do you entice them to complete these modules? The answer lies in how the education is presented. This is the topic of the discussion presented below. 

Presenting TRUE Education

At the NAOI we specialize in what we call "true" education. Too often "education" is a term that is misused to describe such resources as a collection of information articles, glossaries of terms, marketing brochures, elegant looking Web pages, etc. As stated above, this is "information" not "education". True education is so much more. Following are the components of the true education and learning environment developed by the NAOI over a period of ten years and implemented in our Empowerment Program.

• Format - The NAOI presentation format uses the best features of an online component and a hardcopy component. The online component provides an interactive environment for calculators, worksheets, Web links, testing, etc. It also enables individuals to take the course from anywhere they have access to a computer and to complete it at their own pace. Many of our students also want a hardcopy option for reading convenience. NAOI courses offer an optional PDF download for those students who prefer reading hardcopy.
  
  
• Individual Student Records - Effective learning requires that each student be treated as an individual. Students of all NAOI courses "signup" and create a unique individual record dedicated to them. This allows the NAOI system to track individual progress through the course material via our testing module described below and to alert managers when each has graduated.
  
  
• Content - The NAOI has been creating education content for over 10 years. We know that it must be comprehensive, objective, concise and written at approximately an eighth-grade reading level. If courses are too long or too laden with details they will not be read. We also know that content must make liberal use of charts, tables and examples. Thousands of students have graduated from NAOI courses and we are constantly modifying how we present education content based on public feedback. We can review content that you already have and transform to meet NAOI education content standards.
  
  
• Interaction/Involvement - Passive reading is not learning. True education occurs only when students are actively involved in the learning process. NAOI courses require students to interact with calculators, worksheets, tests, etc. This is critical for keeping student interest levels high and motivating them to complete the material.
  
  
• Testing. NAOI courses include a testing module for each enrolled student. After each education module students are directed to a testing area where they answer multiple-choice questions related to the material they have just read. After submitting their answers for a test, students receive instant feedback from NAOI grading servers. Their "results sheet" shows the questions answered correctly and expands on why the answer is correct. For questions not answered correctly the results sheet shows where to find the needed information. It does not simply give them the correct answer. Again, the NAOI has been creating optimal learning environments for over ten years. We understand the critical role of testing and how to implement it.
  
  
• Progress Tracking. Via the testing module described above both students and managers can track progress through the material. A course may have multiple tests. Students can access a "scorecard" that lists all tests for a course or module. When a test is passed, a green indicator lights up on the student's scorecard beside the test listing. By viewing their scorecard, students can track their progress through the material. Progress tracking is critical to motivating students to complete the courses. 
  
  
• Motivation and Reward. These factors are critical to learning. In theory students will complete the 401(k) courses because they realize the importance of the knowledge gained. In practice, students often need more concrete "prodding" to complete the material. All NAOI courses offer a "reward" for completing all of the Program tests. Students are able to access their reward only after completing all tests for the Program. YOU decide what the reward is. It can be a diploma of completion, a gift certificate to Starbucks, a discount on other NAOI investor education courses, etc. You know what rewards will motivate your employees. We give you the tools to implement this critical element of effective education. 

For an example of how the NAOI implements TRUE education using the above elements we suggest that you sign-in to the free NAOI Investing Basics Course. Click here and select the first entry in the order table to do so. Remember, it is FREE! 

Monitoring, Measuring and Actively Promoting Success

Key to the success of the NAOI 401(k) Participant Empowerment Program is the ability for management to know if it is working. The NAOI program is unique in enabling employer HR Departments to monitor the success of the Empowerment Program by providing information related to who has signed up, each student's progress through the material and who has graduated. This information is provided via an administrative module.

By tracking those who signup and those who graduate, you, by default, know who did not signup or graduate. This allows your HR Department to identify individuals who need help and will benefit from more proactive methods of making sure they understand the 401(k) Plan. These measures may include emails, personal meetings, etc.

The NAOI Empowerment Program gives you the tools. Your corporate culture will guide how you use the information and power these tools give you. You certainly don't want to come across as "Big Brother" watching every move of your employees. But as an HR Department your job is to help those who need it. The NAOI Program will help you identify those who need help. How you do so is, of course, up to you. 

How Do We Cooperate?

Working with the NAOI is simple, cost effective and does not require massive up-front development costs. Whether you have 10 employees or 100,000, we can design a 401(k) Participant Empowerment Program that fits your needs. 

The Empowerment Program modules can run on our servers or yours. If you choose to run them on our servers, the Web pages that students see will have the "look and feel" of your site. By using our servers all of the components of "true" education as described above on this page will be available. 

The content presented will have two components. Modules related to investing basics, planning and investment analysis can be mostly generic and the NAOI has already written them. There is little to no development costs. But they can be customized as you wish. The module related to your specific 401(k) Plan will, of course, be customized for your organization. 

How Do We Start?

We start with a no-obligation discussion of your needs and answers to your questions. It is that simple.

Contact us at info@naoi.org or call us at 202-686-2556 and ask for Lee Hevner.