Lucrative baby boomers let down by web flaws

It’s time for retirement income providers to improve their online service

By Alyson Clarke

Australia’s 5.25 million baby boomers own almost 35 per cent of Australia's trillion superannuation assets and hold half of the nation's total household wealth. This makes them an extremely attractive market and, particularly as they approach retirement, a key target segment for wealth management firms.

More than 87 per cent of Australia's baby boomers go online at least once a month. While they’re there, baby boomers have a strong appetite for researching and managing their finances. They regularly look at their accounts via the Internet, and 40 per cent indicate that the next time they look for information on different investments they are likely to do so on the web. As they approach retirement age, many are also looking for financial guidance, with 25 per cent saying that they are interested in using financial calculators such as retirement planners (See Figure 1).

Given this behaviour, the key for wealth management firms in servicing this segment of the market is the service and support features they offer through their websites. So, how do Australia's leading wealth management firms stack up when it comes to servicing baby boomers online and attracting their retirement dollars?

Forrester reviewed the websites of the five largest retirement income providers in Australia: AMP, AXA Australia, Colonial First State Investments (CFS), ING Australia and MLC. We tested each website against specific goals. The goals represent the information and financial guidance a typical baby boomer would look for as she approaches retirement. In assessing the websites, our hypothetical, 54-year-old, mid-income user, Anne, tried to:

• Look for retirement information or tools. Anne specifically wanted to find a retirement income calculator or information to help her to understand at what age she can afford to retire.
  
• Find out about the retirement products available to her. For Anne, this meant obtaining both a broad overview of the types of retirement income-stream products offered, as well as detailed information about fees, charges and other product features.
  
• Obtain a referral to a financial adviser. Anne understands that retirement is complicated and that she doesn't know enough to go it alone. As such, she wanted the product provider to refer her to a financial adviser with whom she could discuss her situation and obtain advice.

We found all five websites to be well below par in many areas: our user was frequently frustrated trying to accomplish her goals.

Our review uncovered that all five providers have lacklustre sites. In terms of ability to reach the stated user goals, the sites' scores ranged from -2 to +11 out of a possible +50, where +25 defined a passing score (see Figure 2). Common problems included failure to prioritise key information, substandard navigation menus, illegible text and poor page layout.

Of the 25 criteria we measured against, all five sites gained positive scores (+1 or +2) on only four: logically placed form fields and interactive elements, consistency in interactive elements, feedback in response to user actions, and site performance.

Of the four main areas we assessed: value, navigation, presentation and trust, the retirement income providers fared the worst on navigation (which looked at categories and subcategories, task flow, hyperlinks and search capability). CFS’ website scored the worst for navigation: -8 out of a possible +12. Categories and subcategories were not always clear, and there was no search engine to help our user achieve her goals. ING fared the best in this category, passing four of the six questions.

MLC's solid effort places it ahead of the pack. MLC was the only provider to pass all four general categories. While MLC’s website suffered many of the same problems as the other providers, it exhibited more best-practice features that the others, scoring a +2 on eight of the 25 criteria. MLC's Retirement Savings Gap Calculator, clear product information and eagerness to refer the user to a financial adviser boosted its score.

The retirement income providers’ scores did, however, exceed those of the four major Australian banks. Forrester has already applied this methodology to the websites of ANZ, CBA, NAB and Westpac. All of the retirement income providers managed to clearly exceed the top bank score, -4, achieved by ANZ.

The bad news

Each of the sites we reviewed revealed serious design flaws in all four general categories. Many of the problems encountered—such as poor page layout that displaced essential content, illogical classification of key information, and substandard search capabilities—negatively affected the ability of our user to achieve her goals.

Value

• Retirement planning tools were missing from AXA’s and insufficient on ING’s site.
  
• CFS would not provide a referral to an adviser.

Navigation

• Content was missing or disguised with rollover menus.
  
• Search engines were missing from CFS’s, unhelpful on MLC’s and faulty on AMP’s site.

Presentation

• Research confirms that a 12-point font size facilitates optimal reading speed, but all of the sites we reviewed used a much smaller font size for the majority of their text.
  
• All five sites displayed examples of poor page layout, most commonly due to the use of oversized, superfluous images

Trust

• Contextual privacy and security policies were simply not there.
  
• Error messages lacked integration and failed to help recovery.

The good news

• Despite the frustrations, we found many positives on the five sites, including several best-practice features.

Value

• MLC's Retirement Savings Gap calculator exceeded expectations. Anne was able to use MLC's calculator easily to determine when she can afford to retire.
  
• AXA's FAQs provided a wealth of customer-focused information

Navigation

• AMP’s site displayed clear and useful categories and subcategories, with names that contained no ambiguity.
  
• MLC’s site provided informative hyperlinks and buttons such as “How to seek quality advice”, “Do you want to contact an adviser" and “More”. Buttons on the MLC site were also unambiguous. For example, “Calculate Retirement Savings Gap”, “Reset” and “Send Request”.

Presentation

• ING’s site had great text legibility. Apart from some navigational menus and footers, the majority of ING's site used a large, readable font.
  
• All five sites logically placed interactive elements. The sites always positioned buttons, drop-down boxes and other interactive elements in the right place on the page—just where the user would look for them.

Trust

• CFS, ING and MLC had best-practice location cues on their sites. These three sites used page titles and visual changes to navigation elements to confirm clearly and consistently that the page loaded was the page that the user had clicked on.
  
• All five sites showed best-practice site performance. We experienced no major system errors while completing Anne’s goals, and all page downloads averaged fewer than three seconds. In this area, the retirement income providers fared better than the banks: ANZ, CBA and NAB all failed this category.

Recommendations

Considering the size of the baby boomer retirement market and the Australian appetite for managing finances online, wealth management firms need to address their website shortcomings. To create a better online experience for this lucrative market and attract baby boomer retirement dollars, product providers must:

• Evaluate existing sites. Firms should use multiple techniques such as surveys, focus groups, expert reviews or usability tests to uncover design flaws. Each technique has its own strength. If there is only time and/or budget for one method, firms should go for an expert—or heuristic—review, which can be fast, flexible and inexpensive, and still detect major design flaws
  
• Fix the easiest design problems first. For common design flaws, such as text legibility or contextual privacy statements, solutions are well understood and backed by extensive research.
  
• Design sites using personas and their goals, not customer segments and tasks. Personas are descriptions of representative users, with detailed information on motivations, goals and preferences derived from in-depth research. With a planned re-design later this year using personas, MLC may well continue to lead the pack in the online arena.
  
• Look across national and industry borders for ways to fix common design flaws. Australian banks can learn a lot from the best practices of international financial services firms. For example, www.vanguard.com offers customers online financial planning tools, and www.fidelity.com focuses on the retirement market with a dedicated retirement resource centre.

Alyson Clarke is principal analyst, financial services with Forrester Research Asia Pacific.