E-Commerce skills don’t translate into financial planning skills. Examining problems customers have with using e-tailers can help employers determine where to emphasize the human element in investing.
Amazon’s merger with brick and mortar food distributor Whole
Foods set off a discussion on what could the company move into next. Some financial
analysts have pondered whether Amazon could take over their industry. But while Amazon excels at delivering an
excellent e-Commerce experience, those skills don’t translate into financial
matters. Taking a look at the details of why those skills won’t translate can
help improve your employees’ experience with your retirement planning. Examining problems customers have with using
the ubiquitous e-tailer can also help in determining where to emphasize the
human element in investing.
According to some studies, only
12% of investors comprise the digital advice opportunity segment. While some
may prefer a more detached approach to investing through algorithms and
robo-investing, the human element is in more demand for most investors. This
could be because financial advice, unlike cat food or the very best pen,
requires an ongoing understanding of individuals and their specific concerns.
While some of an individual’s
specific financial elements can be measured by analytics, such as levels of
risk tolerance, understanding triggers and confidence levels requires more
humanity. Risk tolerance can be assessed
through standard questionnaires. Robo-investing
can help with the basics of investors that are already signed on to a
retirement account. That might include self-correcting account mixes, for
example. But getting investors to sign up for retirement may be more successful
when approached human to human.
Generically, people’s reasons
for hesitating about saving for retirement may fall into broad categories. Addressing
those categories broadly by messaging can be helpful, but might be less
effective than other methods that allow for individual interaction with
financial advisors. Plan sponsors may succeed in having higher enrollment
numbers by increasing the human touch. How do to that? If you view Amazon as an
example of the robot touch, looking at problems with ordering from Amazon can
For example, trust is a key
element in investing. While some financially savvy employees may feel
comfortable relying solely on interactions with robo-investing, most will want
to know they can contact a human and quickly. Access to humans also overcomes the “Amazon
oopsies.” Many shoppers on that e-Commerce site have tales of being sent either
the wrong thing, or too much of the right thing. Usually those mistakes involve
units, such as mistaking a package for a case. Ordering one fishing lure from
Amazon might be just want you wanted, but receiving one case might be slightly
more than the average fisherman can store. The fact that this is a common
mistake on the e-Commerce site shows that the human touch is crucial. Having a
human on the other end of a computer program to take note of unusual activity
can prevent an oopsie. Knowing that
there is a human on the other end of a computer can build trust in using that
system among investors and others.
Often Amazon ordering tales of
woe include item descriptions gone awry. Many of those problems are caused by
language barriers that trip up non-English speakers. The same may be true for
retirement products. No matter how well we try to describe a financial system
or product, our language may be culturally limited. However, on this specific area, Amazon may
have an excellent solution: having peers answer questions from peers from others
may help solve communications hiccups. For example, on Amazon, customers can
ask whether a product can be used for specific applications – like orchid food
being used on other flowering plants. This may be useful for employers looking to
encourage more employees to enroll in retirement programs.
Even more so than just overcoming
communications concerns, the human element is vital to encourage employees to
start saving for retirement. No robot or
algorithm can address fears about college savings or housing market declines
specific to an employee. Each employee
has a unique mix of reasons to hesitate in their savings.
Learning from the troubles with Amazon, having a human to address individual interaction and a mix of concerns, avoiding (or catching promptly) unusual activity or errors in choosing investments, and ensuring communications are culturally appropriate, all increase the human touch.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.get xpress proposal