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Financial Wellness Apps Need Advisor Collaboration Points

Both investors and advisors will benefit from access to the latter's expertise when it comes to digital planning and retirement account applications.

One of the defining trends of our time has been the growth of and dependence on technology. This is true in the financial sector, as digital-first touchpoints through websites and mobile apps have proliferated in recent years, especially when it comes to the management of 401(k) accounts.

According to a 2019 Cerulli report on U.S. retirement end-investors, websites have become the preferred method of engagement with 401(k) accounts. Nearly half of respondents of varying age groups listed a website as their top method for reviewing their 401(k) account. At the same time, mobile apps and text messaging represented a growing method of engagement for respondents younger than 30, with almost 10% listing these as their preferred methods.

Financial wellness apps have grown in popularity too, and functionality has also expanded. Early apps tended to focus on singular areas of financial wellness—budgeting or education or specific account management features. And users were often apprehensive to engage with financial institutions on a digital-only basis, given fears of data breaches or insecure connections. As these safety protections have improved, so has the ability for users to aggregate information and accounts in one place.

One such example of this is the forthcoming Incentive app from eMoney. This financial wellness app provides financial planning, education and spending challenges, which help users change financial behaviors for the better. One key differentiating factor, however, is that the application is positioned through financial advisors. This includes a feature that allows users to directly communicate with advisors within the app. Many people today don’t have access to a financial professional, so Incentive provides an opportunity to create a connection with one.

Having access to an advisor—even if it’s in a virtual setting—provides a level of reassurance and trust that an app or digital experience devoid of this simply cannot provide. The personalized financial advice supported by a professional can be key to a successful relationship between financial institutions and consumers.

Digital advancements in the financial sector have shown that all age groups still want some form of personal consultation; therefore, it’s important not to assume someone’s preferences based on age alone. Though younger age groups may be more comfortable with tech—especially when it comes to complex financial matters—older audiences are quite comfortable with it as well. In the aforementioned report, Cerulli cautions firms against “taking a binary view regarding participant engagement (e.g., millennials prefer digital-only, baby boomers prefer face-to-face contact or a phone call).” While age groups should be considered when making decisions, it’s important to avoid overgeneralizing. 

The COVID-19 pandemic has only accelerated the need for financial institutions to provide easily accessible digital experiences for all. According to Forbes, mobile banking in the U.S. saw a 35% increase from December 2019 to March 2020. That trend has continued over the course of the year, with app intelligence firm App Annie reporting that “monthly time spent in mobile apps grew 40% year over year in Q2 2020, reaching a monthly all-time high of over 200 billion hours during the month of April 2020.” Additionally, eMoney did some of our own research during the pandemic. We found that 69% of eMoney users saw an increase in virtual client presentations, and use of the screen-sharing function within our platform doubled.

Looking ahead, we’re confident that some of the digital habits formed during the pandemic will stick, and usability of financial wellness apps will only increase. Based on Incentive user feedback and other tech trends, we foresee ongoing evolution of several key areas, including streamlined data aggregation, additional customization and gamification.

Aggregation is the compilation of financial accounts that users elect to connect to the app. This is a core technical component and lays the foundation for the financial experience for both the app user and the advisor. Improving data freshness of financial accounts, such as bank account balances or payment transactions, ensures the user experience is focused on improving financial outcomes, not spending time managing data entry.

Another important aspect of the app experience is the level of personalization for the user. The ability to tailor the experience around the things that matter in their life—for example, paying off student loans or buying a house—and giving them actionable ways to accomplish their goals delivers the highest value. Taking that a step further and providing credible education, tailored to their goals, made available within the app and through push notifications can also increase engagement.

Lastly, gamification creates a more engaging and meaningful experience. Users want to be motivated and have fun when engaging with an app. How can we create delightful experiences for users that promote meaningful behavioral changes? Successful tactics will include enhancements that celebrate users meeting goals, achieving milestones and encouraging them on positive behavioral changes.

At the end of the day, we look to technology to make our lives easier and while there are many aspects of our financial lives that can be simplified, there are some that require two-way communication with a financial advisor. Even as users expect the ease and efficiency of a digital-first touchpoint, they don’t want the relationship to end there. In order to be well positioned for success, financial firms and institutions must find ways to meet these expectations by striking a balance between connecting digitally and personally with those they serve.

Chad Porche is VP of innovation and heads up user experience and design at financial planning and technology provider eMoney Advisor.

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