Retirement advice and personalization are becoming foundational expectations for employees, not optional enhancements, said Rachel Weker, retirement strategist at T. Rowe Price Group Inc., during a recent webinar by the organization.
“We anticipate this is going to happen for three main reasons. One is that retirement plan participants are facing increasingly complicated financial backdrops . . . and they’re going to need help. Second, technology is enabling delivery of personalization at scale, and it aligns with the way participants are actively seeking out advice. And finally, there’s an increasing appetite across our industry to deliver scalable advice, especially [as] participants near retirement.”
Today’s workers are juggling more financial priorities than any generation before them, added Weker, noting T. Rowe Price’s research found generation Z in particular was managing more competing priorities than their older counterparts. Despite all that complexity, retirement remained a top priority across all generations, including young workers.
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“Expectations around advice and how it’s delivered are changing. Even with a growing universe of financial tools and content available, employees consistently look to their workplace retirement provider as a primary source of guidance, and they increasingly expect guidance will be delivered through a combination of human support and technology.”
T. Rowe Price’s research also found employees engage with advice and guidance tools that are directly correlated with improved outcomes. Users of advice and/or guidance saved at a rate 29 per cent higher than non-users and had twice the average account balance.
The retirement industry is also entering an era where artificial intelligence can materially improve how advice is delivered, how plans are run and how participants engage, said Brandon Shea, defined contribution strategist at T. Rowe Price.
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“Plan sponsors are looking for better service models, especially for high volume needs, without losing trust and accountability. The question isn’t whether AI is going to transform retirement services, it’s how quickly organizations are going to modernize to do this responsibly.”
If AI is used properly in the retirement ecosystem, Shea said it should remove the administrative drag for advisors so they can spend more time building relationships. For plan sponsors, it means streamlined proposals, back-office savings and more consistent participant education. For participants, it means real-time prompts that reflect their specific situation.
“The real measure of success isn’t going to be efficiency gains. It’ll be whether a participant in their 50s finally understands their retirement readiness, or whether a young worker stays engaged instead of opting out of their retirement plan. So AI is the tool, but better outcomes are the point.”
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