Accessible investing
There is almost no subject more thought about and less discussed than money.
One piece of the money space that seems to make people the most angry and frightened — often to the point of avoiding it altogether — is investing. But unless we are independently wealthy, all of us have to do it to keep pace with the rate of inflation — at least in the United States, if we ever want to stop working.
And yet, in our society, it’s not okay to admit you don’t understand financial instruments or the stock market or how 401(k)s work. Not learning or avoiding it leaves millions of people in a combined state of ignorance and unpreparedness.
What does this mean? This means that we’re about to confront a retirement crisis in the US. (Spoiler: It’s already happening.)
I was hired at Morningstar to help change that.
My metric for success was simple: raise the national average rate of saving for retirement by at least 1%.
I mean, what’s the point of tiny goals?
Investing speak ahead:
For people who want to know if I know what I’m talking about — Morningstar wanted to use Goals-Based Investing, where you set a time horizon, an amount of money you’ll need for drawdown over time, and you are delivered options for a model portfolio that matches your risk tolerance. Then you move your money in, add to the account over time, and voila! Pretty soon you are okay for retirement or other goals.
Morningstar was also behind the curve on what people called “robo” tools, a trend that didn’t exactly work out that well in the end for anyone.
(Let me warn you now: this story does not end happily, and that still occasionally brings a tear to my eye. In fact, when the product manager broke it to me we both cried because we were so committed to solving this problem.)
So, what did I do about it?
Defining lots of moving parts
My earliest collaborators were a lead researcher and a behavioral economist. We looked at models we could use and how to translate them into a combination of education and product, we thought about what kind of support a service like this might need from real people, we went into homes to talk to people, and then we talked to more people.
When it was time to add some pixels to the mix, we chose a few psychology theories and Morningstar methodologies to design an onboarding flow that was mobile first. We talked to more people, testing the heck out of it until we got to a Tinder-like flow for choosing financial goals and a conversational onboarding flow.
We also had to think about where people would be putting their money, which really meant what we were going to do with Morningstar IP and technology. We chose our goals-based model portfolio creation tool, talked to the team that owned it, and started integrating that into the product. That was pretty hard, from a design perspective, to do on a phone. We thought most people would probably move to a larger screen for that part but still designed for a small one.
We also had to figure out how transactions would run once people opened an account. We chose a custodian and set it up to run through Morningstar’s existing registered investment advisory (RIA). Custodians handle actual trades, deposits or withdrawals when people invest in a new portfolio or it needs to be rebalanced. We started integrating their tech with ours.
Just as it was all coming together, when we were ready to pull all of that together to execute on an MVP, the company pulled the plug.
For those of you interested in the evolving design-y aspects of this work, including what I created… well, honestly, there’s just way too much work for a blog post to do it justice. I’m happy to talk about it.
