Online investment portals can help clients visualize and make progress toward their financial goals.
Clients who log in to their dealer’s or pension plan’s portal are more likely to show interest in their investment balance, said Eric Monteiro, senior vice-president of group retirement services with Sun Life in Toronto.
For example, investors who logged in to their group savings portal more than once a quarter in 2023 had an average balance of $123,800, compared with $51,800 for those who hadn’t logged in for 12 months, according to a report released by Sun Life in July.
The study also found that 61% of investors who logged in at least once a year maximized their employer match, while 30% of investors who didn’t log in over a 12-month period maximized their match.
“People are busy or lazy,” Monteiro said. “Half the time, they’re not even aware that there are opportunities to make more out of the plans.”
Digital nudges have been effective for encouraging people to participate in group savings plans and maximize employer RRSP matches. “If we know they have a bonus … we’ll nudge them,” Monteiro said. “You just got $1,500 you weren’t expecting to get? Great time to [maximize the] employer match.”
Monteiro said about 15% of plan members who received a bonus reallocation nudge made a contribution.
While the current nudging capability was developed two years ago with computer models, Monteiro said the next iteration of this technology will use artificial intelligence.
Looking at an online portal too often could cause stress. Those who pay too much attention might overanalyze the market or make unnecessary transactions, said Ben Wilson, advisor services lead and associate portfolio manager with PWL Capital in Ottawa. “Some people will see that the market’s down 5% in a week and they’ll panic and pull money out … whereas if they had just left it, they’d probably be better off.”
Advisors should remind clients that the current market value of their investments is only a part of a financial plan’s goals.
“The portal’s just going to be a snapshot … that only gives you one piece of the picture,” Wilson said. “If it’s a long-term investment, it’s better to look as infrequently as you’re comfortable with.”
Advisors could use client portal data to see when a client has logged in many times over a short period. For example, if the logins coincide with falling markets, the advisor can reach out to calm the client, said Dave Nugent, managing partner with Purpose Advisor Solutions in Toronto. Purpose builds digital platforms for independent advisors.
But when markets fluctuate, not every client needs a soothing message about staying the course, Nugent said. A mass message might prompt someone who was oblivious to the downturn to begin worrying about it.
“As you start to get more data, you can target the messaging in a more precise way,” he said.
In addition to providing advisors with data and clients with nudges, online portals can also host educational content. Over the years, Sun Life has found that users engaged more with short, plain-language videos than text and chart-heavy material, Monteiro said.
Nudges and educational videos can work together. For example, a client may be nudged to contribute to their RRSP in January before the deadline and be shown a video explaining the difference between an RRSP and a TFSA.
“We try to keep a balance between something that requires a call to action … and something that’s more just information,” Monteiro said.