We Just Flunked the Retirement Test

Industry Leaders Offer First Comprehensive Design Principles

Next Chapter leadership representing 60+ firms reports:

  • Objective: Better financial outcomes for all.
  • We can do much better.
  • Smart design leads the way.

Founded in 1968, J.D. Power enabled consumers to make better decisions. A Mazda design flaw was discovered in 1974, the Wall Street Journal ran the story, and the rest is history.

Great Design = Great Solutions = Great Outcomes

  • Most retirement solutions fail to meet expectations for simplicity or effectiveness, according to Next Chapter consumer and advisor analysis.
  • Coordinated elements designed to slide effortlessly into our daily lives have become the expectation. Apple sets the standard.
  • Toyota, Honda, BMW, and Tesla became leaders because of their focus on “design.”

In the financial advice industry, there is lots of talk about planning, analysis, and adoption. But we don’t connect those dots to implementation. Can we answer: how much money consumers will need for retirement? Or how much will healthcare cost?

Adoption Issues Indicate a Design Flaw

“The owner’s manual is dead,” a colleague tells me. If enterprise software doesn’t immediately improve process and experience, it will be dead on arrival. Winners provide intuitive products and services, which guides effective design. David Dintenfass, Fidelity CMO frosts this cake: “True customer centricity is an act of profound humility.”

Design Principles

Great design is a function of an ecosystem that connects with what the user cares about and produce the results they want. Electric cars achieve this only if there’s a support structure of charging stations. The principles of compelling design need a support structure because the focus is achieving the desired result.

Cars and retirement advice are complicated. The car buyer wants reliability, efficiency and to feel good about her choice. “Retirement” needs to do the same. Lots of moving parts in both worlds and both require supportive systems. We test cars and ask drivers what they think. We can do the same with retirement solutions.

Ask the Experts

Next Chapter was started to “rethink retirement.” Industry leaders were invited to explore the topic. We set up teams and looked at all key parts of the retirement planning eco-system.

  • Client Communications
  • Digital Capabilities
  • Easy Client Experience
  • Financial Wellness
  • Easy Client Experience
  • Retirement Income Innovation

The teams began collaborations in May 2020 and asked:

  1. How should we define “retirement advice”? What is “financial wellness”?
  2. How will we know we are solving client needs?
  3. What do advisors need to be effective and efficient?
  4. What does a SWOT analysis reveal?

NextGen Leader Handoff

The Next Chapter Advisory Council examined the six areas and turned over the work to a network of “rising stars” – nominated by the Council or were MMI Pathway to Leadership participants run by Sarah Nau. 60 recruits from 50+ companies asked: How could we sharpen existing offerings and what should guide future efforts?

Next Chapter leaders led the discussion sessions and EY supplied a support team to facilitate the work. We named the program “Leadership in Action” – these are the future company leaders already in significant positions.

Each team contributed fresh perspective and common sense to the task of defining principles in the design of retirement products, processes, and solutions. Ten Common Design Principles and six additional perspectives for each retirement design topic emerged.

These tests reveal design challenges like:

  • Who is delivering the solution to the client? What is the added value – is it obvious to the client?
  • When is the best time to propose or deliver the solution?
  • Where should the solution be available? How do we efficiently deliver the solution?
  • Why is this solution important? Do family members know why this solution is needed?

Winners Only Please

The value of good design is in the outcome – whether it’s a product, process, experience, or solution. “Better outcomes” is the objective of our work on behalf of clients and includes a greater ease of doing business for advisors. Testing existing capabilities for the quality, empathy and effectiveness of the design is now possible thanks to the efforts of our Next Chapter participants and leaders.

Stay tuned for more information as we apply the learnings to existing capabilities and as we develop ideas on next best practices. Why not let smart design lead the way? And, have the humility to admit when we can do better.

Related: Battling Goblin Mode