A hyper-focus on the “consumer experience” is all the rage, as younger generations—especially—value how an interaction makes them feel, in addition to its effectiveness.
That includes financial advice, something an annual report from Hearts & Wallets seeks to quantify.
The latest installment finds a growing number of advice and guidance experiences strive to address multiple goals beyond retirement (or goal integration across household funds), include topics that appeal to younger consumers, and include data fields that capture non-traditional household diversity, all factors that enhance the quality of advice.
Retirement Planning
The “best” retirement planning experiences recommended an achievable increase in annual saving and allocate saving across five to six different account types, such as 401k, employer match (if available), taxable brokerage, IRAs, college planning, etc.
Where to save is the top consumer pain point, as identified by Hearts & Wallets quantitative research.
Retirement planning, including how much to save for retirement (59 percent), and choosing investments (57 percent) are the biggest pain points for Americans who are still in the working stage of life.
Quality of advice on total annual saving varied widely with targets ranging from $24,585 to nearly double that of $51,273 for the hypothetical couple.
Overall, more experiences are delivering actionable recommendations, such as providing a retirement age as an output instead of input, how much to save for college with detailed options of public vs. private college costs and even expense breakdowns for living at home.
Also, more experiences are focusing on financial wellness or “smart investing.”
Experiences with a value proposition of financial wellness increased from 21 percent of advice experiences benchmarked in 2017 to 32 percent in 2018.
Experiences with a “smart investing” value proposition rose from 3 percent to 17 percent.
More actionable outcomes for consumers, such as “improve current path” and “how to succeed,” were in 67 percent of advice and guidance experiences.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
