If you’re looking to build a long-term retirement account relationship with a specific financial advisor or company, you may want to check out the firm’s digital app before you move your money.
That’s the upshot of the J.D. Power 2023 U.S. Retirement Plan Digital Experience Study. In fact, the report found that customers who are most satisfied with the mobile apps of their retirement plan providers are more likely to consolidate their accounts. Additionally, they’re more likely to keep their money with the same provider, even when they change jobs.
Do you have questions about saving for retirement or planning out your retirement income? Speak with a financial advisor about it today.
What J.D. Power’s 2023 Study Says
Among the various plans surveyed, the best score went to Capital Group/American Funds, which received 753 points out of a possible 1,000 points. Second-best was Charles Schwab, with a score of 746, while Bank of America (including Merrill) ranked third at 715.
While the survey found customer satisfaction improved during the last year with the digital apps provided by retirement plans, the retirement industry lagged well behind other types of financial services. On a 1,000-point scale, wealth management apps were rated 701, property and casualty insurance apps scored 702 and automotive insurance apps hit 718. Overall, 38% of retirement plan participants were satisfied by the digital offering provided by their retirement planners.
“Consistently, we’re finding that improved digital experiences are critical to strong financial performance,” said Craig Martin, J.D. Power’s managing director and global head of wealth and lending intelligence. “Participants who have a great digital experience vote with their dollars, with roughly double the amount of participants rolling in assets from other plans and more than triple the amount saying they will keep their money with their current provider if their job situation were to change.”
Retirement Planning on Mobile Devices: How Important Is It?
These mobile apps are gaining popularity. While just 35% of plan participants had downloaded their retirement plans app in 2021, that level increased to 47% in the 2023 version of the survey. In addition, while the 2021 survey found that only 27% of participants had used the mobile app in the last 30 days, the level of usage increased to 38% in 2023.
Furthermore, the app is the most popular digital method of access for retirement plan and account information. In fact, J.D. Power’s data put overall satisfaction with retirement plan mobile apps at 728. For mobile and desktop browser-based versions, this is 38 points higher and 72 points higher, respectively.
If retirement plan administrators need any more encouragement to improve their mobile apps, it’s the finding that better digital experiences for participants translate into more money in their retirement accounts. The survey found that 34% of participants who are most satisfied with their plans’ digital offerings move money from earlier retirement plans into their new accounts. This compares to just 20% of participants who give their digital experience low scores.
Beyond that, satisfied participants also said they were more likely to keep their money with their current plan if they changed jobs. This occurred at a rate of 48% for those who rated their digital experience well, versus just 15% of those who gave poor ratings.
One reason to consider the quality of your retirement plan’s digital apps is that the better ones can encourage investors to combine all their retirement accounts in one place. This allows investors to keep an eye on how all their investments perform. This could make it easier to stick to a long-term strategy instead of constantly shifting investment accounts when you change jobs or find an issue with your current accounts.
Retirement Planning Tips
- A financial advisor can help you build a plan for retirement. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Planning ahead for how much you’ll need in retirement can be difficult. SmartAsset’s retirement calculator can help you determine exactly how much you’ll want to save to support your retired years.
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