Early versions of web portals for plan participants only provided information on account balances and investment options. Today’s innovative portals supplement that basic information with retirement-income planning analytics and participant-specific advice on improving retirement outcomes. Page and site layout designs and user-interaction features are changing, too, based on behavioral finance research and observations of participants’ interactions with their portals.
A Challenging Trifecta
Presenting information is only one goal of portal design, according to Jane Souza, senior vice president, digital platforms with Fidelity. Plan participants want their personal information combined with Fidelity’s expertise and presented clearly to encourage the right behaviors—a shift that requires behavioral analysis. “It’s not good enough just to know who they are and tell them what to do,” says Souza. “You need to couple that with a presentation that is the most compelling way to get them to make that change.”
These requirements create what Souza calls a “very sophisticated trifecta.” Artificial intelligence systems can analyze participants’ needs and behaviors and follow up with recommendations, but it still takes an effective design to motivate participants to make changes. “Now I know what to tell you to do, (but) how do I present it to you in a way that’s most likely to get your attention and to compel you to make the decision?” Souza asks.
Figure 1 shows a sample Fidelity plan portal home page that includes the participant’s health and insurance accounts in addition to DC-plan information. The center graphic uses a journey analogy with a progress report. The employee’s financial goal is to have $50,000 saved by age 30 but she’s currently on track for a projected $42,617 balance. The plus and minus signs on the Contribution Rate box allow participants to see how changes to their savings rate affect their projected savings versus the Milestone goal.
Vanguard also is taking its DC-plan portals in new directions, according to Lauren Valente, head of Participant Experience and Recordkeeping Services for the Vanguard Institutional Investor Group. In an email response, she explains the revamped portal’s holistic planning approach gives participants a snapshot of their current and future retirement savings. When participants log on, they quickly see how much they currently have saved, their future retirement income and the next best step to get or stay on track for retirement.
The site uses integrated proprietary technology, the Vanguard Retirement Readiness Tool, to aggregate savings data, including current plan savings, Social Security and other outside assets. The Tool calculates how much money or income participants will have in retirement and compares these numbers to an estimate of how much they will need. The home page also serves up a “nudge”—the next best step for each participant that can be accomplished in a few simple clicks—such as saving a few dollars more to reach the company match or signing up for automatic annual savings increases, Valente adds.
Figure 2 shows Vanguard’s site design sample. Participants see account balance information, a retirement income projection and a recommended action step in a left-to-right flow across the upper page. If a participant wants to do additional planning, see statements, review investment performance, make investment changes and so on, the links for those tasks are readily visible.
Both firms report active usage of their portals. Souza says over 4 million unique users access Fidelity-plan pages, with 70 percent coming from desktop computers and 30 percent from phones or tablets. Most visitors start by looking at their plan balance, but the Milestone approach often leads to further investigation. “It’s not just presenting them their balance but giving them some context that says based on what you earn, in order to replace that income, you should have such number of dollars by your next five-year increment,” Souza explains. “And, from there, often we’ll see users change their contribution rate to increase or change their investment allocation. That incents them to drill a little deeper into the site.”
More than half of Vanguards 4.4 million DC-participants have logged on to their plans’ web portal through June 30, 2017, says Valente, with 35 percent coming in on a mobile device. However, when participants chose to make a transaction, the majority of digital transactions were completed using a desktop versus a mobile device, she adds.
The next phase in portal design must recognize that digital information delivery is moving beyond desktop and mobile screens. Emerging interaction points include wearable devices and in-home, voice-activated devices like Amazon Echo and Google Home. These new channels may change how participants interact with their plans’ platforms. “Not only do we have to be sophisticated in what information we present them; we also have to think about all the different ways that they might consume it,” says Souza. “I think over the next couple of years that’s going to be the real challenge from a digital perspective.”