Capital Group/American Funds ranks highest in retirement plan digital satisfaction according to J.D. Power’s U.S. Retirement Plan Digital Experience Study, released today.
The study examines retirement plan participant satisfaction with plan provider digital experiences (desktop/mobile web and mobile app) across four factors: information/content; navigation; speed; and visual appeal.
Capital Group/American Funds earned a top score of 753, while Charles Schwab ranked second with a score of 746 and Bank of America (including Merrill) third with a score of 715. Vanguard (708) and Fidelity Investments (707) rounded out the top five among 19 recordkeepers ranked in the study.
The latest results provide some good news for retirement plan providers: as participants become more frequent user of mobile apps, satisfaction is rising—up to an average score of 685 from 663 last year, on a 1000-point scale. Satisfaction with frequent users of mobile apps is even higher even higher at 728, compared to 690 for mobile sites and 656 for desktop sites.
In last year’s study, Bank of America and Charles Schwab tied for the highest ranking with a score of 704.
“The good news is that overall satisfaction with the retirement plan digital experience is up considerably this year, but when we compare those scores to similar customer-facing industries such as wealth management, property and casualty insurance and automotive, it’s clear that retirement plans still have a lot of opportunities to improve their digital offerings,” said Craig Martin, managing director and global head of wealth and lending intelligence at J.D. Power.
“Consistently, we’re finding that improved digital experiences are critical to strong financial performance. 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,” Martin added. “The effects of the digital experience to the business are impossible to ignore and will only become more important when an inevitable market downturn occurs and satisfaction is affected.”
Following are some key findings of the 2023 study:
- Retirement plan digital experience improves but continues to lag other industries: Overall satisfaction with retirement plan digital experiences increases to 685 (on a 1,000-point scale) this year, a 22-point increase from 2022. However, just 38% of retirement plan participants give their plans high marks for their digital capabilities. Overall satisfaction lags significantly behind other industries in which J.D. Power conducts studies, such as wealth management (701), property and casualty insurance (702) and automotive (718).
- Mobile apps take center stage as critical tool for retirement investors: Retirement plan mobile apps have shown substantial increases in adoption and continue to drive higher levels of satisfaction when they are used. Nearly half (47%) of participants have downloaded their retirement plan’s mobile app, up from 35% in 2021, and 38% have used the mobile app in the past 30 days, up from 27% in 2021. Overall satisfaction with retirement plan mobile apps is 728, which is 38 points higher than for mobile websites and 72 points higher than for desktop websites.
- Strong digital experiences drive strong bottom line: More than one third (34%) of retirement plan participants who give their provider the highest marks for their digital experience have rolled over money from other retirement accounts, compared with just 20% among clients who give their retirement plans poor ratings on their digital experience. Likewise, the percentage of participants who say they “definitely will” keep assets with their current provider in the event of a job change is 48% among those giving their retirement plans the highest ratings for digital, which compares with just 15% among those with low digital satisfaction.
“The digital playbook for retirement firms could not be any clearer,” said Jonathan Sundberg, director, digital solutions at J.D. Power. “More clients than ever are interacting with their brands via mobile apps, and when they do, virtually every mark of customer engagement, retention and asset acquisition increases. Right now, a handful of standout firms are really delivering well when it comes to the mobile digital experience, but many more still have a great deal of work to do to get to the level of experience participants expect based on their interactions in other industries.”
SEE ALSO:
• Too Many Advisors Can’t Spend Enough Time with Clients: J.D. Power
• Self-Directed Investors Don’t Understand Digital Advice: J.D. Power
• Charles Schwab Tops Latest J.D. Power Full-Service Investor Satisfaction Rankings
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
