In a new study of 401(k) plan providers, America is No. 1.
The consumer research company J.D. Power has released its
The full list can be found at the end of this article.
The study ranked 19 retirement plan providers in terms of customer satisfaction with their digital platforms — in other words, how easily users can view their plans on a phone or computer. After surveying 5,804 customers, J.D. Power awarded each provider a "digital experience" score on a 1,000-point scale and then ranked the companies from highest to lowest.
American Funds, owned by Capital Group, took the top spot with a score of 753 — the highest of any plan provider — followed by Charles Schwab with 746 and Bank of America with 715.
Craig Martin, head of wealth and lending intelligence at J.D. Power, said American Funds pulled ahead of the pack by designing its website and mobile app for average consumers — not for the experts.
"What they've done pretty well here is keeping it simple, clean and straightforward," Martin said. "They and Charles Schwab are significantly above the industry average."
In the bottom rungs, Corebridge — formerly known as AIG Retirement Services — came in dead last with a score of 647. Not far behind were Voya Financial, in the penultimate slot with a score of 656, and Paychex in third-to-last with 657.
Overall, customer satisfaction crept up this year, if not by a spectacular margin. The average score was 685, a 22-point increase from
But there was also another factor: More and more customers are using their plans' mobile apps, which are generally more popular with users than websites. In 2023, 47% of participants downloaded their plan's smartphone app — a significant jump from the 35% who did so in 2021.
"All things being equal in the digital space, mobile experiences — mobile apps in particular — tend to be a more satisfying experience," Martin said. "And we're seeing a materially larger percentage of consumers say they're using mobile apps."
But according to J.D. Power, there is still a long way to go. Only 38% of customers were highly impressed by their plans' digital interfaces. And digital satisfaction with retirement plans still lags behind the levels seen in other fields, such as wealth management and insurance.
"We have a lot of other industries that are still pretty far ahead," Martin said. "There's no one that can declare victory at this point."
The good news for plan providers is that there's a clear benefit to improving their apps and websites. Among customers who had a positive digital experience, 34% rolled over money from previous retirement accounts, compared with just 20% of those who had a negative experience. And of those who were highly satisfied with their digital experience, 48% said they "definitely will" keep their retirement savings in their current plan, even if they change jobs — compared with just 15% among those who were not satisfied.
"The digital playbook for retirement firms could not be any clearer," Jonathan Sundberg, J.D. Power's director of digital solutions, said in a
To read J.D. Power's full rankings for 2023, scroll through the list below. And to review last year's rankings,
