The Best & Worst Retirement Plans for Digital Experience: J.D. Power, 2021
J.D. Power's new study on investor interaction with retirement plan digital channels finds that the majority of retirement plans do not deliver proactive guidance, and many make it hard for users to find information they are looking for on their websites and mobile apps. The study found that just a quarter of retirement investors strongly agreed that their provider offers proactive guidance and help. Only 43% said they found it very easy to pull up the information they were seeking on their plan's websites and apps. "Very often an individual's first experience with investing happens within an employer-sponsored plan, giving these plan providers an inside track to build a relationship and retain and grow the participant's assets long after they have separated from their current employer," Mike Foy, senior director of wealth management intelligence at J.D. Power, said in a statement. "Many of these providers have invested significantly in developing digital content and tools to provide education and guidance, but if participants are unaware of those resources or can't easily find or use them, it's a huge missed opportunity." Some standout performers, however, are setting themselves apart from the pack. The top and lowest performers in the study are separated by nearly 100 points on a 1,000-point scale, setting up a new battle for retirees as virtually every participant interaction has shifted to digital channels. The U.S. Retirement Plan Digital Satisfaction Study, formerly known as the U.S. Retirement Plan Participant Satisfaction Study, was fielded in May and June and received responses from 5,363 retirement plan participants.
What Makes Providers Shine
The study found that proactive guidance is key to customer engagement, but few retirement plans deliver. It said Net Promoter Scores significantly increase — by 1.26 points on a 10-point scale — among participants when their retirement plan provides proactive guidance via digital channels. Participants who receive this guidance are also 25 percentage points more likely to keep their retirement assets with their current retirement plan provider or roll over to a separate IRA with that provider. Even so, just 24% of retirement plan investors said they strongly agree that their retirement plan provider offers proactive guidance and help. According to the study, overall satisfaction with the mobile app experience is 69 points higher than for websites, yet only 35% of participants have downloaded their retirement plan provider's app to their phone. By comparison, 52% of utility residential customers have downloaded their energy provider's app. J.D. Power also found that retirement planning and savings done in isolation from a participant's other short- and long-term financial goals and needs are ineffective. Although 58% of plan participants in the study said they are generally financially healthy, among those who are not — because they are overextended or stressed or vulnerable — satisfaction scores are much lower for the value of the information and content provided. The study said it behooves providers to do a better job of understanding participant needs and delivering more relevant digital content. See the gallery for the retirement plan providers with digital satisfaction above, and below, the national average. — Related on ThinkAdvisor:
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