Ahead of the FCA’s consultation submission deadline of 13th February 2025 here’s my initial take on the FCA’s proposal and the opportunities for pension providers.
Targeted Support for Pensions is:
- A new type of ‘product communication’ outside of GDPR/ICO ‘marketing’
- A regulated activity in its own right distinct from holistic financial advice
- Focused on Defined Contribution pension savers and those in decumulation
- For consumers who have limited touch points with their pension providers
Targeted Support for Pensions will:
- Combine product and consumer information to create Targeted Support journeys
- Be ‘opt-out’ for consumers, so it’s ‘always-on’ product/customer event monitoring
- Be subject to Consumer Duty so consumer testing & outcomes monitoring will be key
- Probably be free at the point of delivery
Pension Savers will:
- Be allocated to segments of consumers with similar characteristics
- Be able to provide limited additional information to their product provider
- Receive an actionable suggestion they can trust for people in their circumstances
Pension Firms providing Targeted Support will:
- Design and build pre-defined ‘scenarios’, ‘segments’, ‘solutions’ and ‘suggestions’
- Have freedom to adapt these to their own business, products and customers
- Need to access and verify consumer data before making a ‘suggestion’
- Use their judgement to define and evidence ‘better outcomes’
Why it matters:
- There’s a looming retirement crisis: More retirees, more pots, more solutions – yet fewer advisors to help
- In isolation, Targeted Support has the potential to help millions of people to better understand and engage with their pensions, however;
- Combined with Pensions Dashboards’ Post View Services, Consumer Duty’s flexibility and the drive toward Smart / Open Data, Targeted Support gives pension providers the opportunity to fundamentally redesign the way they engage their customers at key life and product events
What else? The FCA…
- Has opened the door to a pension consolidation journey from within a QPDS pensions dashboard
- Provides pension providers with flexibility to design their own solutions or for a standardised industry solution
- Will consult on Targeted Support for Retail Investments in H1 2025
Need help? Moneyhub is…
- Designed from outset as an ‘open data’ platform in which pensions providers can quickly build, test and refine their targeted support journeys
- Able to continually ingest and monitor product data from core product systems, external consumer data or 3rd party sources such as Pensions Dashboards
- The ideal place for pension providers to build their scenario, segment and suggestion/solution engines
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