Retirement guidance for ‘people like you’

Retirement advice remains the ‘cornerstone of financial advice’ and increased demand for retirement advice is being driven by the UK’s ageing population and continued economic uncertainty, according to latest research from NextWealth, sponsored by Bandhan Life

However, the same research reports affordability to be the biggest barrier to people taking advice. The Financial Conduct Authority 's latest discussion paper, DP23/5 Advice Guidance Boundary Review – proposals for closing the advice gap reports that their 2022 Financial Lives Survey found that only “8% of adults reported taking financial advice over the previous year – just 4.4 million consumers in 2022”.

What then for the other 92%?

The discussion paper makes 3 proposals:

1.?????? Further clarifying the (advice/guidance) boundary,

2.?????? Targeted support

3.?????? Simplified advice

Targeted support explores a new regulatory framework which enables firms to broaden the support they can provide to consumers and would enable firms to suggest products or courses of action based on a target market the consumer has been identified as belonging to, rather than fully individualised support. The suggestion to the consumer would be appropriate to a person in similar circumstances (a target market the consumer can be identified as belonging to) and could result in the firm suggesting options to the consumer based on ‘people like you’. The FCA see this as a key new proposal to help close the advice gap and boost access to financial support across the UK.

At Life Moments we provide guidance to customers. We use data gathered to “personalise” offerings to ‘people like you’ by creating cohorts. Each cohort is provided with bespoke support (to aid decision making) and financial education based on the characteristics of the cohort. The guidance can lead to a Next Best Action suggesting a course of action including that the customer should seek advice where appropriate.

We have created Retirement Hub to provide guidance to those pre-, at- and in-retirement (the latter are a neglected segment according to customer research). It has tested incredibly well with customers:

?“Fantastic! Trying to find information online is a struggle and I go to various sources.” (Male, <60, not retired)

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“This is exactly what I was talking about, it’s a great thing. That’s exactly what I need, someone advising me on what I should be doing to be wealthy enough to live comfortably…That would be great.” (Male, <60 not retired)

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“We are all at different stages, it does change from pre-retirement to when you reach retirement age. Once you retire, there is not much information out there and you might start panicking. In principle, this is a good idea.” (Male, <60, retired)

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“It’s going to say: ‘This is what you must do and this is how we can help you to do it’.? I would feel that [the check-up] would give me the confidence to say I am in the right place to say what I am doing, or maybe the right idea to make the changes I am thinking of doing, to ensure happy retirement.” (Female, >60, retired)

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Please let me know if you want to see the proposition designs that prompted the feedback [email protected]