The introduction of targeted support marks a critical evolution in the financial services industry’s approach to consumer engagement. If properly implemented, it will have a significant impact a long-standing gap in the market, helping millions of consumers make better financial decisions without requiring full regulated advice. However, for it to realise its full potential, the framework must be designed to be flexible, outcome-focused, and commercially viable. This means ensuring regulatory clarity, avoiding unnecessary exclusions, and incorporating strong customer-focused design practices to make targeted support a practical and effective solution.
Altus Consulting highlights seven key areas of critical importance:
1. Outcome-Focused Consumer Segmentation
One of the most compelling aspects of targeted support is its outcomes-focused nature. We believe that consumer segmentation for targeted support should not begin with rigid regulatory definitions or prescriptive consumer categories but should instead start with the outcomes firms are looking to achieve and work backwards from there.
2. Customer Experience and Triage at the Heart of Targeted Support
For targeted support to be effective, customer-focused design approaches must be at the core of its delivery. A key component of this is a strong triage system that ensures consumers are matched with the most appropriate form of support.
3. Avoiding Unnecessary Exclusions
For targeted support to be a meaningful solution in improving accessibility across pensions, advice, and retail investments, it must not be unduly restricted in terms of who can supply it and what areas of the market it applies to.
4. Beyond Products: The Role of Behavioural and Financial Nudges
While product suggestions will form an important part of targeted support, some of the most impactful interventions—particularly in the pensions space—are likely to involve non-product nudges. These could include prompting consumers to increase pension contributions after a pay rise, review beneficiary nominations, or plan for retirement income needs.
5. A Common Framework Over Fragmented Regulation
For targeted support to succeed, it should operate within a single, consistent regulatory framework that can be applied flexibly by providers to suit their products and customers.
6. Regulatory Certainty and Enforcement Clarity
For firms to confidently implement targeted support at scale, regulatory certainty and clarity on enforcement activity are essential. If targeted support is to succeed, the rules must be clear and stable, and firms must be able to rely on the FCA’s guidance without fear of retrospective enforcement actions shifting the standards over time.
7. Expanding Access Rather Than Rewriting the Rulebook
Ultimately, targeted support should not be seen as an attempt to rewrite financial regulations but rather as a way to apply existing regulatory principles more broadly to increase accessibility across the market.
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