Voya Financial Launches Behavioral Finance Institute for Innovation

"We are pleased to embark on this new initiative that supports Voya's broader commitment to helping individuals plan, invest and protect their savings so they can retire better," said Alain Karaoglan, chief operating officer for Voya Financial. "As more Americans take on the responsibility to prepare for their retirement, we recognize the need to help them make the right choices. Our Institute will take a scientific approach that applies lessons learned from research, along with measurement and validation, to develop solutions that can lead to improved financial outcomes."

To create the Institute, Voya teamed up with renowned behavioral economist Shlomo Benartzi, professor and co-chair of the Behavioral Decision-Making Group at UCLA Anderson School of Management, who is serving as a senior academic advisor for Voya. Voya is also engaging several other leading academics, including professor John W. Payne from Duke University's Fuqua School of Business. Rick Mason, senior advisor at Voya Financial, will help coordinate the efforts for the company. Research associated with the Institute will be conducted in laboratory, panel and field settings. The Institute also plans to collaborate with Voya's employer clients and distributors to bring these concepts to life in a manner that best serves their plan participants. 

The Institute will support Voya across all of its businesses. Among other things, research will examine how to improve outcomes in areas such as savings rates, participation in workplace plans, portfolio diversification, creating sufficient retirement income and preventing money from prematurely leaving retirement plans (when participants cash out their savings after changing jobs).

"By leveraging the latest academic research, the Voya Behavioral Finance Institute for Innovation has the potential to help millions of Americans improve their long-term financial security," said professor Benartzi. "Scientists have learned a tremendous amount about how people make decisions. With this knowledge and the Institute's unique approach, we can make a difference and help people 'get it right' when it comes to their retirement."

Behavioral Finance and its Contribution to Retirement

The field of behavioral finance, which applies psychological theories to finance, has offered valuable insights and solutions to help Americans achieve better outcomes. Ground-breaking areas of study have resulted in innovative retirement plan features and investment options, most notably: auto-enrollment; auto-escalation; and target-date funds.

"This body of research has produced significant advancements, and the financial services industry has recognized its outcomes and benefits," said Charlie Nelson, chief executive officer of Retirement for Voya Financial. "We believe there is even greater opportunity today to improve savings rates with the data and insights available from phone and advisor interactions, as well as digital tools such as retirement plan websites, mobile devices and apps. Our goal is to be known by our clients and partners as a leader that advances this valuable research."

The launch of the Voya Behavioral Finance Institute for Innovation included a forum in New York City on Oct. 18, where Nelson and Benartzi joined Voya executives, clients and distributors, along with members of the media, for a discussion on the Institute's first white paper, "Using Decision Styles to Improve Financial Outcomes – Why Every Plan Needs a Retirement Check-Up."

The paper, written by Benartzi, examines the two primary styles that people use to make decisions. By analyzing these decision styles, data collected from the online activities of retirement plan participants can inform a sponsor about the overall "health" of its plan and, more importantly, the actions it could take to set participants on a more effective course.

"Planning for retirement is often treated as a one-time event, but the reality is that it's a long journey requiring adjustments and course corrections along the way," said Benartzi. "Plan sponsors must remember that even if employees are enrolled in a plan, they may still require check-ups to achieve a successful retirement. Research conducted with the Voya Behavioral Finance Institute for Innovation offers an opportunity to discover new solutions that can help people on their retirement journey."

For more information on Voya's Behavioral Finance Institute for Innovation and to view the findings from Benartzi's current white paper or future studies, please visit Voya.com/behavioralfinance.

As an industry leader and advocate for greater retirement readiness, Voya Financial is committed to delivering on its vision to be America's Retirement Company™. Our goal is to make a secure financial future possible for everyone — one person, one family, one institution at a time.

Media Contacts:
Joe Loparco
Voya Financial
Office:  (860) 580-2677
Cell:  (860) 462-6525
[email protected]

Laura Maulucci
Voya Financial                                                 
Office: (860) 580-1278                                      
Cell: (508) 353-6913                                          
[email protected]   

About Voya Financial^®
Voya Financial, Inc. (NYSE: VOYA), helps Americans plan, invest and protect their savings — to get ready to retire better. Serving the financial needs of approximately 13 million individual and institutional customers in the United States, Voya is a Fortune 500 company that had $11 billion in revenue in 2015. The company had $466 billion in total assets under management and administration as of June 30, 2016. With a clear mission to make a secure financial future possible — one person, one family, one institution at a time — Voya's vision is to be America's Retirement Company™. The company is equally committed to conducting business in a way that is socially, environmentally, economically and ethically responsible — Voya has been recognized as one of the 2016 World's Most Ethical Companies^® by the Ethisphere Institute, and as one of the Top Green Companies in the U.S., by Newsweek magazine. For more information, visit voya.com. Follow Voya Financial on Facebook and Twitter @Voya.

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