Advisors know using too much industry jargon is a sure way to trip up many retirement plan participants right off the bat. That’s an issue Schwab Retirement Plan Services was keen on minimizing when creating its latest tool to help workers take control of their financial lives.
Enter “My Financial Guide,” an interactive, online dashboard designed to help retirement plan participants save and invest that Schwab launched today. My Financial Guide walks participants through a financial health assessment using straightforward questions most workers can answer without having to look at their financial records. The guide helps create a custom plan with clear steps to work toward their specific goals.
“My Financial Guide was developed through extensive research and user testing to give workers the power to take control of their financial situations on their own terms,” said Nathan Voris, Director, Schwab Retirement Plan Services. “We know workers want help with their finances, but many are confused by industry jargon and find it difficult to start the planning process. This interactive experience was designed to help meet their expressed needs and complement other educational resources and tools we provide to employers who want to offer competitive benefits and help employees save and invest for the future.”
Schwab Retirement Plans Services’ annual survey of 401(k) participants found that workers want more help saving and planning for retirement. Six in 10 participants (61%) think their financial situation warrants professional advice this year, an increase from 50% in 2020. My Financial Guide responds to these needs with modules on critical topics that retirement plan participants frequently want help addressing, including:
- Emergency Savings: educates participants on why preparing for the unforeseen is an integral step toward achieving financial goals
- Debt: teaches participants how to manage debt and build repayment strategies
- Insurance: details how participants can protect themselves and their finances from the unexpected
- Estate Planning: explores ways to help guide how a participant’s assets are handled when the time comes
Each topic can be accessed independently so that employees can work on the financial areas they care about most, at their own pace. Modules cut through financial jargon to help provide education as well as simple next steps. For example, the insurance checklist contains definitions of basic terms in addition to considerations for major insurance types and step-by-step guides to explore coverage options to help determine if they meet financial goals.
“My Financial Guide covers critical areas that employees say they want help with from their workplace, delivered through a modern, intuitive user experience that reflects our commitment to digital innovation that drives engagement,” Voris said.
Designing around employee needs
Working with experts in Schwab Digital Services’ Innovation Lab, teams conducted extensive user testing to see financial challenges through the eyes of real participants. Three critical insights emerged from this process:
- Workers’ financial lives change over time, so the support they receive should too
- Many workers feel they are not worthy of a financial plan, which they view as difficult to make
- Workers prefer support on their own terms, meaning where, when and how it best fits their goals and lifestyle
My Financial Guide prompts users to provide information such as marital status and household income that drives customized visuals, next steps and goal setting. For example, the landing page includes a prominent “Small steps for you” section, designed to help workers make incremental progress towards their financial goals without becoming overwhelmed.
Behavioral economics drives much of the guide’s interactivity. The Emergency Savings module, for example, helps encourage participants to take action by drawing on goal gradient theory, which shows that motivation increases as individuals believe they are closer to achieving a goal. Participants see their emergency savings goal mapped out with a percentage progress bar, monthly savings amount, and the next six-month milestone. They can use sliders to shorten the timeframe further to see monthly goals and progress. Even if long-term progress is small, being on the verge of a short-term success may help keep participants motivated.
At the end of each module, participants receive a personalized checklist of next steps based on their inputs and can check on their guide periodically to track progress against goals and update their information in response to any major changes. My Financial Guide also includes options for participants to obtain financial coaching and get connected with tools, additional guidance, and resources beyond their workplace plan to help address broader financial goals.
“Many workers prefer a do-it-yourself planning option if the interface is intuitive and the next best actions are clear,” Voris said. “We also know that workers often don’t have the time or resources to complete the planning process on their own. My Financial Guide’s modular, personalized approach incorporates human coaches so that participants can receive support the way they want it while focusing on improving their financial health.”
In addition, clients of Charles Schwab & Co., Inc. who have brokerage accounts can receive a complimentary financial plan for needs beyond their workplace plan.
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