Improvement Needed in Retirement Plan Digital Experience

As retirement plan customers increasingly rely on digital channels for managing their financial futures, the quality of those digital experiences has become crucial. However, according to the newly released J.D. Power 2024 U.S. Retirement Plan Digital Experience Study, most retirement plan providers still have significant room for improvement.

Only 21% of retirement websites and mobile apps met customer expectations for delivering a valuable digital experience, far behind other industries and potentially jeopardizing assets under management, the researchers found. For plan advisers, this could provide an opportunity to work more closely with clients and their participants.

“The first and most important thing advisers should be doing when it comes to digital is to get familiar with the tools and resources their firms provide to clients,” says Craig Martin, managing director and global head of wealth and lending intelligence at J.D. Power. “This will allow them to spotlight capabilities that are aligned with their clients’ needs.”

Martin says advisers should also be asking participants about their digital usage habits and experiences. Having a good understanding of what participants are using and not using in the site, or app, can spotlight knowledge and awareness gaps the adviser could help fill that will increase the perceived value of the digital experience.

Financial wellness has become a key focus for many retirement plan providers, who aim to offer more than just basic financial products, according to Martin. However, without strong digital engagement, many customers fail to recognize or appreciate these efforts. This disconnect results in wasted resources and missed opportunities for business expansion, as providers struggle to communicate the value of their offerings to digitally disengaged users, Martin says.

On the plus side, J.D. Power did find that overall satisfaction with the retirement plan digital experiences has increased to 703 (on a 1,000-point scale), up 18 points from 2023. But those platforms still lagged behind other sectors such as insurance, automotive finance, utilities and banking. Retirement plan apps and websites struggled with ease of use and making information easy to find—critical aspects of a successful digital experience, according to the consumer research firm.

J.D. Power’s digital experience hierarchy rates retirement plan websites and apps across three performance levels: foundational, functional and valuable. Foundational experiences prioritize design, security and access to key information, while functional experiences focus on usability and navigation. Valuable experiences go further by offering personalization and proactive engagement. According to the study, 21% of retirement plan digital experiences did not meet the basic criteria for a foundational experience, and only 21% delivered what would be considered a valuable experience.

There is a clear connection between strong digital offerings and customer loyalty, according to the researchers. The study showed that customers are nearly twice as likely to retain their assets with a provider during a job change if the provider delivers a valuable digital experience. Furthermore, 40% of customers are more likely to roll over funds from other retirement accounts when they enjoy a superior digital experience.

The study, conducted from May through July, was based on responses of 5,638 retirement plan participants.