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Personalised Guidance - Helping You Take Better Decisions

What is Personalised Guidance? 

Personalised guidance is the provision of information and support tailored to your behaviour, financial circumstances and/or demographic information. It helps your pension provider explain the consequences of decisions that you, as the customer, ultimately must take. 

It is different to the information and support your pension provider, investment platform or mutual society can provide you with to help you take financial decisions.

IMPORTANT - Under the current rules, your financial services provider is not able to offer tailored support. Information provided must be purely factual and generic.

Our Research Findings

We teamed up with Thinks Insight and Strategy to test the theory that personalised guidance can lead to more effective customer decision-making. 

The answer is a resounding yes. Personalising guidance can be very effective as long as it:

  • Limits the amount of information provided to the customer
  • Utilises design features, e.g. choice architecture
  • Highlights specific options or reduces the range of options

In our research, participants chose how much to withdraw from a hypothetical pension pot.

When provided with generic guidance on income tax implications, 14% of participants chose the correct option.

However, when given concise guidance highlighting a specific withdrawal amount based on the customer’s circumstances, 76% correctly withdrew an amount that would avoid them needlessly paying additional tax.

We believe these findings are remarkable and very clear, strengthening the consumer case for the use of personalised guidance by financial services providers. The Financial Conduct Authority and HM Treasury’s ongoing Advice Guidance Boundary Review provides the perfect opportunity for the government to allow the use of personalised guidance for the benefit of customers like you.

What We Are Doing 

We will publish our full research report in early December 2023. It will include additional findings on consumer's

  • willingness to pay for personalised guidance
  • willingness to pay for advice on the back of personalised guidance, and
  • expectations of firm’s liability and responsibility for personalised guidance.

We will also meet with the FCA’s Consumer Panel, government bodies and industry stakeholders to discuss our findings, and use our findings to inform our response to the Advice Guidance Boundary Review, which will continue into 2024.