San Ramon, Calif. – June 8, 2017 – Research-backed employee financial wellness company Retiremap today unveiled the first financial coaching platform combining human coaching with robo-advisor capabilities. Developed in tandem with Duke University’s Common Cents Lab, the new Retiremap Platform leverages behavioral insights to maintain the human element of financial coaching while automating just-in-time communications to enable a scalable financial coaching program at an affordable price.

Designed for employers and financial advisors, the Retiremap System harnesses behavioral economics best practices to promote accountability, goal creation and progress, confidence, and mental accounting by employees. After building and testing live prototypes with Common Cents, the program is currently being rolled out by a number of employers and advisors, including the award-winning retirement plan advisory firm Channel Financial.

According to a study by the Center for Financial Services Innovation, 57% of American adults are struggling financially, and 43% of U.S. households struggle to keep up with their bills and credit payments.

“Our mission is to help more underserved populations tap into critical financial guidance,” said Retiremap CEO Matt Iverson. “It is clear that financial education has failed to impact employee behavior over the last three decades. However by turning retirement plan advisors into financial coaches using automated technology and behavioral strategies, we are moving the needle for the populations that need it most.”

The use of robo-advisors as an alternative to costly and difficult to scale one-to-one financial coaching has grown in popularity and has led to an increase in venture funding for these technologies. However, researchers have shown that financial coaching remains one of the most effective tools for changing financial behavior and promoting financial wellness.

“Numerous studies indicate that financial education has minimal long term effects on changing financial behaviors,” said Channel Financial Partner Matt Gulseth. “Most of the financial wellness programs we evaluated have been based on the faulty premise that education changes employee behaviours. It doesn’t. We are working with Common Cents Lab and Retiremap because they are creating behaviorally sound protocols that change employee behaviors.”

Created in partnership with Common Cents Lab, the Retiremap platform provides the human element of financial coaching while automating personalized email, SMS and in-app communications. Over the course of a year, the Common Cents team evaluated behavioral research around financial decision-making to create an eight week system that harnessed the resulting best practices to promote financial wellness.

“We partnered with Retiremap to develop a scalable and effective robo-advisor as a way to increase savings and financial wellness,” said Common Cents Lab co-founder Kristen Berman. “The result is a platform that removes the complexity from financial decision making and delivers positive, personalized coaching one step at a time.”

To learn more about the Retiremap System, visit http://retiremaphq.com/.

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About Retiremap

Retiremap is a research-backed social venture focused on helping employees set and achieve their financial goals, particularly those employees experiencing financial stress. Retiremap automates and integrates advisors into the financial wellness program to achieve significantly greater employee behavior change.

To achieve its social impact, Retiremap partners with top plan advisors and recordkeepers seeking to have an outsized, measurable impact on employee behavior.

About Common Cents Lab

The Common Cents Lab, supported by MetLife Foundation, is a financial research lab at the Center for Advanced Hindsight at Duke University that creates and tests interventions to help low- to moderate-income households increase their financial well-being. Common Cents leverages research gleaned from behavioral economics to create interventions that lead to positive financial behaviors. The lab is led by Behavioral Economics Professor Dan Ariely and is comprised of researchers and experts in product design, economics, psychology, public policy, advertising, business administration, and more.

To fulfill its mission, Common Cents partners with organizations, including fintech companies, credit unions, banks, and nonprofits, that believe their work could be improved through insights gained from behavioral economics. To learn more about Common Cents Lab visit www.commoncentslab.org.

Press Contact:

Michael Azzano

Cosmo PR

415/596-1978

michael@cosmo-pr.com

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See what Dan and Aline have to say in their paper on the choice architecture of privacy decision-making, hot off the presses, and make sure to check out the accompanying infographic below!

(Ariely, D. & Holzwarth, A. (2017). The choice architecture of privacy decision-making, Health Technology, 7 (22), 1-8.)

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We’re excited to announce that we’re searching for our next class of the Startup Lab, which begins October 2017.

Applications are only open until June 30th at 5pm EST–  

Our academic incubator supports problem-solvers by making behavioral economics findings accessible and applicable. See how behavioral researchers and entrepreneurs work together at the Center for Advanced Hindsight:

The Startup Lab provides:

– Ability to explore behavioral economics and learn how to leverage findings for your startup

– Opportunity to collaborate with world-renowned behavioral researchers

– Guidance and resources to run rigorous experiments

– Office space in downtown Durham, NC up to 9 months (October-June)

– Investment up to $60k

Are you insatiably curious about what drives decisions, shapes motivation, and influences behavior? Does your startup’s success hinge on the ability to affect positive behavior change that helps people live happier, healthier, and wealthier lives?

We’re looking for startups that are eager to experiment, and demonstrate a passion for building research-backed solutions to health and finance challenges.

. You only have until June 30th at 5pm EST.

To learn more, visit our FAQs (includes information on the Startup Lab investment structure and other logistics) or connect with us at startup@danariely.com.

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Our team at Common Cents worked with employee financial wellness company Retiremap to build an 8 week financial health platform that keeps the human advisor but uses technology to automate the coaching. By doing this, we aim to provide the benefits of financial counseling at a larger scale.  After building and testing live prototypes, we are rolling out the program with a number of employers and advisors, including the award-winning retirement plan advisory firm Channel Financial. Over the next year we’ll kick off a controlled trial to measure its impact.

In order to build this product, Retiremap and Common Cents had to understand and then operationalize the key drivers of financial counseling programs. Accountability, Confidence and One-Time Decisions are the three main product principles that we narrowed on to drive the development.

Accountability

To overcome the “intention-action” gap, we often need an external push. Accountability through deadlines or check-ins are just two examples of external motivators.

We’ve seen the power of deadlines time and again in our own experiments: one doubled the response rate to an email by including a reply deadline, and another increased the number of applications for a low interest rate loan by 24% simply by including a deadline.

For example, Minneapolis North High School effectively applies the accountability principle. Students are required to meet with a designated adviser: a classroom teacher who essentially doubles as an academic coach. This 36-minute period of accountability is cited by teachers and administrators to be a main driver in improved graduation rate. Minneapolis Public Schools increased their graduation rate by 39 percentage points over the last two years.

How do we apply this in Retiremap?  

There are two phone sessions with your advisor at the start and at the end of the program. But we needed to keep people motivated during the 8 weeks to complete the financial challenges and make some real changes to their savings, debt, and spending habits. To set ourselves up for success, the platform incorporates deadlines, active commitments, forced choice, calendar appointments, and implementation intentions to help increase the odds that people won’t lose motivation.

Below are some sample screen captures highlighting the accountability concept. 

Confidence

In a clever study,  researchers Hadar, Sood, and Fox examined the role confidence plays in our financial decision-making for retirement savings. The study’s researchers broke participants into two groups and provided each with different materials. One group was given basic descriptions of low- and high-risk investment funds, while the second – a more advanced description with complex terminology.

The participants were then asked how likely they would be to invest in each fund. Those given more technical and advanced descriptions were less likely to invest, regardless of whether the fund was low or high risk.

Participants’ confidence in their understanding of the funds played more of a role in their investment decisions than the actual risk profile of the funds.

How do we apply this in Retiremap?  

In the RetireMap Platform, there are many times that we remind users that they are more than capable and ready to take control of their financial future.

Below are some sample screen captures highlighting the confidence concept. 

One Time Behaviors vs Habits

Habits are hard to break. Habits are hard to form. When at all possible the Retiremap platform emphasizes “one-time” behaviors that people can do to improve their financial life.

For example, we help people design their bank account structure to match their long term goals. In a three-year randomized experiment, researchers found that parents provided with college savings accounts showed higher social and cognitive performance. The hypothesis is that parents given college savings accounts changed how they thought about their child’s future.

This intervention was not about educating parents about their child or about their finances. Instead, this intervention was designed to help parents create a “college-bound” savings account by default. In this way, researchers made it easy for parents to opt into a child savings account.

By providing a separate account, the researchers helped create a college-bound identity for the children in their parents’ minds.

How do we apply this in Retiremap?  

RetireMap uses this same strategy to help employees save on everything from short-term savings to 529 plans to retirement accounts. This One- Time Behavior of setting up an account and the automatic transfer takes much less mental energy than monthly budgeting to figure out how much you can spend and how much you have saved up.

It’s just the beginning.

Common Cents partnered with Retiremap to develop a scalable and effective robo-advisor as a way to increase savings and financial wellness for those who need it most. We think the result is a platform that removes the complexity from financial decision making and delivers positive, personalized coaching one step at a time. As the journey continues we will report on its impact in the field.

To learn more about the Retiremap System, visit http://retiremaphq.com/

1.  Lerman et al., 1995; Marcus et al., 1998; Proper et al., 2003; Rimer and Kreuter, 2006
2. The ABCs of Financial Education: Experimental Evidence on Attitudes, Behavior, and Cognitive Biases Fenella Carpena, Shawn Cole, Jeremy Shapiro, and Bilal Zia

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(Click/tap for a full sized version!)

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Would you like to spend less money eating out and more money seeing the world?  Maybe a trip to a tropical beach or weekend getaway with friends or family?  If you’re like most people, the answer is Yes!  Exactly how much of a yes, though, may have a lot to do with your age.

In a collaboration between our startup, MoneyComb, and Dan Ariely’s Center for Advanced Hindsight at Duke University, a recent survey was conducted on spending habits and desires.[1]  We investigated how people feel about their spending across 9 common discretionary categories: things like eating out, entertainment, travel, and shopping for clothes, home goods, and electronics.  Also included were recreational purchases like gym memberships, personal services like salons and spas, and digital services like cable bills.

Our hypothesis was most people would like to spend more on experiences and less on things.  The data, however, suggested people take a more nuanced view of these decisions.  For example, eating out is experiential and often social—two things that recent research suggests promote happiness.[2]  But far and away, it was eating out, along with digital services, which people felt they spend too much on.  On the other hand, where people wish they could spend more, did focus on experiences.  Three of the top four categories to spend more on were travel (1), personal services (3), and entertainment (4).  But number two on the list surprised us, home goods like furniture and décor.

We also found some interesting differences among generations.  Primarily we looked at Millennial adults aged 18-34 versus older adults.  It seems Millennials are much less happy with how they spend their dollars than Mom and Dad.  For example, Millennials, on average, wanted to cut their spending on eating out by a whopping 37% whereas older generations were looking for a more modest cut of about 13%.  Everyone wished they could travel more, with older adults wishing they could double the amount they currently spend on travel, but Millennials want that amount to almost triple as a relative percentage of their discretionary dollars.

In summary, a fairly clear picture emerged.  For the sake of simplicity, we combined our three shopping categories—clothes, electronics, and home goods—into one shopping bucket.  (Overall, the desire to reduce spending on clothes and electronics eclipsed the wish to increase on home goods.)  We also combined recreational and personal services into a category called Recharge.

The bottom line: We want to move a large chuck of eating out dollars to travel, from shopping to recharge, and from digital services to entertainment.

So how do we do that? Well, unfortunately, it’s not that easy.  But we’re trying our best to help.  We’re working on a new personal finance tool that helps people track their day to day purchases so their actual spending matches up better with their desired spending.  It’s called MoneyComb.  To give it a try, go to www.MyMoneyComb.com.

Health and finance startups: Like MoneyComb, you too can dive into BE research as a means of informing product development. The Startup Lab is accepting applications until July 3^rd. Apply now.

[1] Our survey was conducted in May 2016 with over 250 respondents nationwide. 53% were aged 18-34 (Millennials), 47% were older adults.  Gender breakdown was about 50/50 and income ranges were generally representative of the US population.

[2] See “Time, money, and happiness” by Cassie Mogilner and Michael Norton.  Available online at www.sciencedirect.com.

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The problem:

While proper, quality and immediate care for medical procedures is almost always ideal for the patient and their family, it is sometimes not financially feasible. Kiwi understands this and works with the provider and the patient to create customizable health savings plans.

At the clinic and after their doctor appointment, a patient will meet with a Kiwi advisor to plan out the payment terms, frequency and amount. Once terms are developed, Kiwi users are sent home with their payment plan and an activation code. The patient can activate the plan by paying an initial down payment at the local convenience store.

What actually happens after the patient is sent home? Nothing.

During Kiwi’s initial pilot only 1 person out of 40 people actually started the plan post clinic appointment and meeting with Kiwi.

Why is this?

Once a patient leaves the clinic the decision making process becomes complex. Behavioral research suggests that the more complex the decision, the less well equipped people are to deal with it.^[1] Unfortunately the decisions which matter the most in life, such as selecting medical treatments or investment strategies, are often those which people are least equipped to make.^[2]

How can Kiwi increase the likelihood that patients will start their plan?

For a complex decision like this, the patient will have a tendency to avoid making any decision.^[3] They will go with the default option, which in this case is deferring the choice all together.^[4]

What can Kiwi do? At StartupOnomics summit with Irrational Labs, Kiwi was able to break through this problem and design a plan that changed the default.

Kiwi made a down payment necessary to the platform by requiring that users to put at least 100 pesos (roughly $8) immediately into their savings account in order to receive a membership card. Now the default behavior is to activate the plan vs. the default to avoid the decision and ‘do nothing’.

This solution is also elegant because it takes advantage of the foot-in-the-door selling technique.^[5] The foot-in-the-door technique suggests it is better (about 13% better^[6]) to ask for small things first – like a tiny down payment – before going in for the BIG ask. People are more likely to say yes to big commitments if they have been previously asked and have said yes to small commitments.

This is exactly what happened.

By changing the default with a small commitment that got people activate their plan IN the clinic, Kiwi improved their uptake rate to 15% from a near 0% uptake rate.

Background:

With a grant from The MetLife Foundation, Irrationals Labs hosted 12 financial inclusion startups at their third StartupOnomics conference. At the three day event Irrational Labs co-founders, Dan Ariely and Kristen Berman, as well as phDs and professors from the nation’s leading behavioral and economics programs helped companies consider how behavioral economics can improve their users’ health, wealth and happiness

Sources:

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