Research Note: Reading between the lines: understanding of targeted support in retail investments

Read the Research Note (PDF)[1]

Read the annex (PDF)[2]

Many people are missing out on advice and support that could help them better manage their finances. As part of the Advice Guidance Boundary Review, the FCA is proposing a new approach called targeted support to help narrow the gap between advice and guidance. This allows authorised firms to use limited information to offer appropriate suggestions to consumers who share similar high-level characteristics.

To test how consumers respond to targeted support communications for retail investments, we conducted behavioural research with consumers. We tested:

• The impact of information provided during the targeted support journey on consumer behaviour.
• Whether providing additional information, including information about the suggestion, how it was generated, and behaviourally informed messaging, could enhance consumer understanding of targeted support.  
• How additional information affects uptake of the suggestion, confidence in decision-making, and sentiment towards targeted support.  
• Consumer responses to targeted support versus general guidance (general information about what investing is and how to invest).

This Research Note investigates targeted support communications for retail investments. We also investigated targeted support communications for pensions. These experiments were independently designed with results reported separately. Further interpretation of the policy implications of this research, taken together with the research on pensions, are included in the Annex (8) to CP25/17, ‘Lessons from behavioural testing for targeted support[3]’. 

Authors

Rhosyn Almond, Lucy Hayes, Steven Human, Isaac Keeley, Krishane Patel​.

Disclaimer

Research notes contribute to the work of the FCA by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence that the FCA may use while discharging its functions and to inform its views. The FCA endeavours to ensure that research outputs are correct, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that research notes contain any errors or omissions, they should be attributed to the individual authors, rather than to the FCA.