The Challenge: Bridging the Engagement Gap
New research from Cerulli Associates reveals a significant challenge in the retirement planning sector: the underutilization of financial wellness tools by plan participants.
Per its “U.S. Retirement End-Investor 2024” report, less than 20% of participants use these products and services, underscoring the need for more engaging and accessible solutions. Common attributes of the most effective programs include some form of guidance or coaching that considers each participant’s entire financial life.
Of 401(k) participants who used a financial wellness tool, nearly 60% were ambivalent about their experience. This suggests that while the tools have potential, they may not be engaging or accessible enough to make a meaningful financial impact.
“Financial wellness programs that are most effective should evolve to include guidance that provides users with actionable and achievable steps to take that will improve their financial life,” says Elizabeth Chiffer, analyst at Cerulli.
While financial education builds financial literacy, that is only one component of financial wellness. “Financial wellness programs must help users make positive financial decisions,” Chiffer continues.
Plan advisors have a strong incentive to boost engagement with these programs, as enhanced engagement strengthens long-term relationships between participants and professional advisors.
TIFIN @Work: Pioneering Personalized Financial Guidance
TIFIN @Work is based on the fundamental importance of designing financial wellness programs that resonate with participants. The platform, grounded in actionability, transforms how plan participants engage with their financial lives. This personalized approach ensures advice is relevant and actionable, empowering participants to make informed decisions. Here’s how we’re making a difference:
Personalized and Actionable Advice
Financial wellness goes beyond financial literacy and education. It involves guiding participants to make decisions that enhance their overall financial health.
One barrier to effective financial wellness programs is the overwhelming nature of financial information. TIFIN @Work distills this information into concise, actionable, and relevant messages suited to each participant’s needs. Demystifying financial jargon and focusing on achievable steps helps reduce financial stress and encourage proactive participation.
Cerulli’s research emphasizes the need for financial wellness programs to provide personalized, straightforward advice. TIFIN @Work is a pioneer in this area by leveraging AI to deliver tailored guidance that aligns with each participant’s unique financial situation. This personalized approach ensures that advice is both relevant and actionable, empowering participants to make informed decisions to achieve their financial goals.
Integrating Financial Life Events for Holistic
By integrating significant life events into financial planning, participant engagement grows. TIFIN @Work aggregates data across an individual’s financial life from payroll to retirement savings to brokerage accounts to create a more informed picture of the participant’s financial life. The platform’s advanced algorithms continuously monitor changes and adapt suggested next steps accordingly.
Providing timely and relevant advice based on life events empowers participants more effectively navigate their financial journeys. Plus, participants can use the platform to help them with personal goals, including:
- Buying a house for growing family
- Planning for a 6-month sabbatical overseas.
- Retiring at 55.
- Optimizing benefits when starting a new job.
The platform steps beyond providing financial education, and instead prioritizes actionable steps each individual can take to work toward their specific goals. Each individual can develop specific goals that are broken into stepping stones with prioritized best next actions.
TIFIN @Work’s holistic approach ensures participants receive comprehensive guidance tailored to their specific needs and goals.
“The key to increasing engagement with financial wellness tools is to make them relevant and accessible to each participant,” says Marc McDonough, CEO of TIFIN @Work. “By leveraging AI to personalize the experience, we fundamentally transform how participants progress toward financial freedom.”
The Path Forward
The underutilization of financial wellness tools calls for action to bridge this engagement gap. Participant usage and satisfaction will grow significantly when programs evolve to be more engaging, personalized, and actionable. TIFIN @Work is committed to leading this evolution, setting a new standard for how plan advisors, sponsors, and participants interact in the retirement space.
For more information on how TIFIN @Work can help drive engagement and improve financial wellness among your plan participants, schedule a call with our team.