Retirement Plan Investors Face Challenges Managing Digital Accounts

According to J.D. Power, Bank of America and Charles Schwab tie for the top spot in digital participant satisfaction.

By DJ Shaw

Retirement investors feel their financial health is deteriorating, and many are concerned about their investments—but when they turn to their plan’s website or app for help, they are not finding what they need, a recent survey by the firm J.D. Power found.

Overall satisfaction is down 12 points (on a 1,000-point scale) this year, as 53% of retirement plan investors are now classified as financially unhealthy and 63% said they have challenges managing their accounts digitally, according to the 2022 U.S. Retirement Plan Digital Experience Study. Based on responses from more than 7,000 retirement plan participants and conducted in May and June, the study measures customer satisfaction across four factors: information and content; navigation; speed; and visual appeal.

“Retirement investors are under a great deal of financial stress right now and they are looking to their plan’s websites and apps for information and guidance,” said Mike Foy, senior director and head of wealth intelligence at J.D. Power, in a statement. “Unfortunately, many are not finding what they need and end up having to call customer service for help. This is a moment-of-truth opportunity for plan providers. When they get the digital experience right, they see a very significant lift in the likelihood to grow and retain participant assets long after they have left their current employer.”

During the past year, the percentage of financially healthy retirement investors has dropped to 47% from 60%, with 28% now falling into the financially vulnerable category, the study found. Overall satisfaction with retirement plan digital experience has fallen 12 points, similar to the decline seen in financial health.

Strong digital performance is highly correlated with the acquisition and retention of retirement investor assets—highlighting the importance of how a good digital experience can help retain customers, the study says. Among top digital performers, 50% of investors said they “definitely will” keep their assets with their current provider in the event of a job change, versus 17% of investors with low-performing firms. With average job tenure for Millennials and members of Generation Z now hovering below three years, retaining investors through employment changes has become a top priority for retirement plans, the study adds.

Overall customer satisfaction with retirement plan digital experience rises 191 points to 671 when participants can complete tasks by themselves on their plan’s website or mobile app, the study says. However, just 37% of investors said they can manage their accounts digitally without contacting customer service.

According to the study, overall customer satisfaction rises 178 points when investors believe the retirement plan websites and apps offer proactive guidance and help, yet just 22% of firms evaluated are meeting this performance indicator.

Bank of America (including Merrill) and Charles Schwab rank highest in retirement plan digital satisfaction, in a tie, with a score of 704. Prudential Financial ranks third with a score of 696. Fidelity investments came in fourth with a score of 690, followed by T. Rowe Price with a score of 689. The industry average is 663.