When it comes to managing 401(k) investment allocation transactions, a new study suggests that the usability of key website features represents one of the most persistent problems across provider interfaces.
Two seemingly tangential features that came up continually during Corporate Insight’s examination of the processes that allow participants to manually build their portfolios include prepopulating new allocation fields with current elections (35%) and dynamically calculating the percentage of the account allocated (88%).
The report, “The UX of Managing Future Investments,” reviews the investment election management transactions that a group of firms provide online through in-person user experience tests. (It does not cover interfaces where participants select model portfolios or TDFs, nor does it discuss online advice platforms that let users change their future elections.)
According to the firm’s 2017 DC plan participant survey, the ability to manage future investment allocations received the highest rating in terms of web-based transaction types, with 69% of respondents deeming it to be “very or extremely important.” In the new study, however, Corporate Insight found that the differences between the investment transactions available on participant websites can be difficult to understand, even for savvy retirement planners.
In its user test, the firm identified some best practices and things to avoid when it comes to investment transactions. First, it notes that participants appreciated pages that listed the investment transactions available with clear descriptions for each option. When these transaction-overview screens had action-oriented names, like “Manage Investments,” the study’s UX test respondents were confused when the pages linked to investment information rather than transactional screens.
User-test respondents also consistently expressed a desire to view investment performance data in a manner that does not interfere with their ability to use the transactional interface. They also preferred that information be available statically, which makes it easier to compare funds, according to the study.
Multiple respondents also mentioned that the funds opening within separate browser windows or tabs was beneficial, allowing them to refer to the fund data while maintaining ready access to the transactional interface. Across the coverage group, linking to full fund profiles is one of the most common features, available on 76% of websites.
And while participants want to see fund performance data, the study notes that only 29% of firms offer the rate of return for any timeframe and they struggle to present data in an unobtrusive manner. Outside of links to full fund profiles, the firms in the report do not consistently provide fund information and the only common piece of data is the asset class.
Asset Allocation Advice
Asset allocation advice is a welcome, though rare, feature (18%), but the firms that offer advice make it difficult to enact, the study found.
One respondent said, “Your 401(k) is not something you make changes to every day, it’s a long-term kind of deal, so if I am making changes then I am interested in advice, more than for other financial accounts.” The study emphasizes that this quote underscores that when it comes to retirement planning, most people log in to their retirement plan websites less often and perform fewer tasks than they do on other finance-related sites. Consequently, they may need more guidance in order to feel confident when making investment decisions.
Respondents also raised the issue that in some cases, pie charts depicting suggested allocations are not viewable throughout the transactional interface. Users also appreciate having the ability to specify allocations by source and the option to apply changes to current balances, in cases where both features were found to be fairly common (41% each).
Organizational features are “particularly important when it comes to future investment transactional interfaces, as many plans offer a litany of fund options,” the study observes. Participants in the user test consistently expressed frustration when investment lists were especially long, often making it harder to find key interface features. To help participants locate and browse funds, they should be organized by asset class, which 76% of firms in this report do. And although incorporating expandable sections can shorten potentially long fund lists, only 18% of firms use that approach, the study notes.