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Putnam Tries a Little Motherly Advice

"We should send letters to the parents of the Gen X'ers telling them to tell their kids to join their 401(k) plans,'" Kathy Sharpless, managing director and director of communications of Putnam Investments, remembers a dean from a leading college saying at a 401(k) roundtable that Putnam held a year ago.

Other academics and professors piped in, and the discussion became quite heated over how much easier it would be for people to grasp the rich rewards of saving and investing if only their parents ingrained the idea in them at an early age, Sharpless said.

The idea struck Putnam marketing executives after they read the transcripts of the meeting and the Boston-based mutual fund company subsequently decided to produce a videotape for its 401(k) plan sponsors using this theme. Called "Listen to Your Mother," the tape features four ethnically diverse mothers who lovingly nag, "Don't roll your eyes at me," "Don't talk to strangers," "Don't forget to call when you get there," and, the punch line, "Money doesn't grow on trees."

Putnam representatives show the three-minute tape at the beginning of enrollment meetings where they are present to introduce Putnam's 401(k) options to plan participants. Putnam's representatives make in-person enrollment visits to companies with 5,000 participants or more, Sharpless said.

Although Putnam has produced enrollment videotapes in the past and has even custom-produced tapes for its largest clients, this is the first videotape to take a somewhat light-hearted approach, Sharpless said. The humor seems to be working, because the tape has succeeded in prompting a higher percentage of prospective participants to sign up for its 401(k) plans since Putnam began showing the tape in April, Sharpless said. She had no numbers to back up this claim.

"Listen to Your Mother" serves as a "user-friendly meeting-opener," Sharpless said. "It gets peoples' attention, gets them sitting up in their seats for an information-rich session that can be complicated and intimidating for many."

Putnam formed its 401(k) advisory council a year ago to hear outside opinions on how effectively it presents its 401(k) plans. The council is comprised of academics, including deans from institutions including the Massachusetts Institute of Technology, Harvard, Dartmouth, Cornell, Boston College and the University of Massachusetts, and is scheduled to meet a third time later this month.

"Our intent was to bring in outside people who could critique our work for its appropriateness, understandability and helpfulness, and who could help us to understand how adults learn," Sharpless said. "For the most part, they told us we were in the right direction."

Besides listening to the academics' critiques, Putnam's marketing staff hoped to gain ideas on how to reach all of its 401(k) plan participants, who are "demographically, psychographically, and geographically diverse," she said.

"We decided mothers were a good common denominator," said Sharpless. "After all, everyone has a mother."