Investor satisfaction with their retirement plan's digital experience continues to improve, however it still lags behind other major industries, according to the latest research from J.D. Power.

As part of the U.S. Retirement Plan Digital Experience Study, more than 5,000 retirement plan participants rated the satisfaction of their digital retirement plan experience out of 1,000 points. The average result was 685, which is 22 points higher than last year, the report found.

While there was an improvement over last year, only 38% of those surveyed offered high marks for their experience. It is significantly behind other industries that ranked their digital experience higher including wealth management, which saw an average score of 701, property and casualty insurance at 702 and automotive at 718.

While firms have improved their digital experience for retirement planners, there is a correlation between market performance and ovverall satisfaction, said Craig Martin, managing director and global head of wealth and lending intelligence at J.D. Power.

“Consumers are tied to their money really closely, so their financial position and their financial situation is going to impact satisfaction,” he said. “We saw a pretty substantial increase in satisfaction and part of that is due to the fact that the market got better.”

The motivation for a firm to have a manageable digital experience plays a role in how a client feels about them, the study found. Of those that gave their firm high marks, 34% said they have rolled their money over from a previous provider after a job change. In contrast, of those that gave their provider low marks, only 20% rolled over their money over to the new provider.

“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,” Martin said.

That is true for those with a provider they have given high scores to, according to the study. Forty-eight percent of the plan participants who gave their provider high scores said they definitely would keep their assets with their current provider. In contrast, of the ones who bestowed low marks, only 15% said they would definitely keep their assets with their current provider.

“If I have a bad digital experience I start to think negatively or at least less positively of my employer because it acts as a proxy for how much you value me,” Martin said. “Did you invest in the best of the best? Have you really demonstrated that you care by making sure my benefits are at the top of the spectrum or are you cutting costs at every corner?”

A critical component of the digital experience is how a firm incorporates apps into the experience. Apps have become a convenient tool for investors because they provide easy access to their financials through their phone.

“Apps are kind of this unique thing where it's almost a relationship commitment,” Martin said. “It’s on the phone and easier to access and key information is upfront.”

The number of retirement plan participants who have downloaded their respective app has increased substantially in the past two years, according to the study. This year, 47% of those surveyed downloaded the app as opposed to 35% in 2021. Meanwhile, 38% said they had used the app in the past 30 days, which is also up from 27% in 2021. 

“We see that the mobile app is by far and away the most satisfying experience,” Martin said. “If you get a mobile app it tends to be the optimal [choice] and what we saw is a pretty substantial increase in the percentage of folks downloading mobile apps.”

The overall satisfaction score for apps was 728, which is 38 points higher than for mobile websites and 72 points higher than for desktop websites, the study found.

Investing in digital technology can help firms remain connected with their clients. However, they must be sure to know exactly what their clients are looking for and make the technology user-friendly and conducive to their needs, Martin said. Otherwise, they run the risk of alienating the very people they are trying to attract.

“Understanding that broader opinion of what’s important and what is the priority is critical [because] when you lack that you tend to invest in really fancy capabilities and features and functions that 90% of your customers don’t use or value,” he said. “There’s a lot of great things out there that if the client doesn’t know how to use them, they are of little value, so education and information is critical.”