The great majority of these tools, however, were simple calculators, such as those that calculate mortgage payments based on a certain size loan and interest rate. Account aggregation technology, which is becoming increasingly popular in financial services, should encourage the use of more complex tools. It relieves customers of the need to hunt down all the data on their own. Assuming customers have their main accounts listed on the aggregation site, the planning engine can simply import those files automatically. Once usability improves, institutions will need to focus on deploying the automated planning technology to best advantage.
Marketing is critical.
Experts agree that the tools are most effective when offered as part of a comprehensive package. Joseph Eck, senior vice president at Mellon Financial Corp.'s Dreyfus Retirement Services division, says advice engines are a useful supplement to retirement services that help participants invest more wisely. Eck says this aspect especially appeals to plan sponsors, who want clients to tap into the proper investment choices. Earlier this year, Dreyfus began offering a financial planning tool from mPower Advisors, which specializes in online advice for defined contribution plans. Eck likes the program's automated links to investor account records and employee data.