Personalization Isn’t Everything, It’s the Only Thing

By Alan Gross

As consumers, we’ve come to expect personalized products, services, and experiences and providers have listened. We personalize our coffee, our playlists, our travel amenities, our menus. Everyday we enjoy a tailored experience and that translates to brand loyalty and profit for companies who get it right.

Personalization is nearly everywhere and where it exists, it’s expanding thanks to the tandem of Big Data and AI that enable an ever more curated experience. In contrast to this tidal wave of individuality, the company retirement plan experience lags this trend. It’s beginning to happen, unevenly, and it needs to accelerate and gain momentum – now.

Any financial planner will tell you that getting to know your client: Understanding their unique personal and financial situation and goals is essential to creating a financial plan. No one would defend a “one-size-fits-all” financial plan as remotely adequate. Yet, many 401k and other company retirement plans scarcely apply any meaningful personalization to the user experience. And, if our goal as an industry is to optimize for more successful retirement outcomes, a personalized, tailored approach is essential.

The problem is not that we lack clarity on what we need to do. We know personalization matters and that it needs to operate on at least two levels:

1. The first level of personalization addresses every user and helps them understand their retirement funding goal based on their unique situation. This takes into account their age, income, savings (inside and outside of the plan), spousal savings, contribution rates, employer matching contributions, gender, desired retirement age, retirement location, and more.
2. The second level of personalization connects this information to professionally managed account programs. Given that many workplace savers are inexperienced and unprepared to manage their own investment strategy, MAPs can be instrumental in helping them be more successful in saving for retirement.

The problem has long been that the quality and breadth of data needed to produce this kind of experience has been out of reach and technologies to support truly personalized experiences at scale have been prohibitively expensive to build and support.

The answers are never generic or based on averages. They are calculated and unique to every single participant. That’s Level One Personalization delivered at scale.

iJoin addresses Level Two Personalization through its innovative “Managed Account Marketplace” that provides advisors and their clients immediate access to programs that offer a cost-efficient “manage-it-for-me” option deployable as QDIA or opt-in.

Vince Lombardi once said “Winning isn’t everything, it’s the only thing.” He later remarked he was really thinking more about “effort” than results, but there’s much to be appreciated by committing to a clear purpose. He also said, “Perfection is not attainable, but if we chase perfection, we can catch excellence.”

Both of these ideas are applicable to the pursuit of “personalization” in retirement plans. It’s not everything, it’s the only thing. Without it, our industry cannot reach its goals. With it, we have the best chance of living up to our promise.

Reach out to learn more about how to put the power of iJoin to work for you.