Targeted support: Turning perception into reality

This article first appeared in Professional Adviser in January 2025.

I remain very optimistic that targeted support will unlock a transformation in how customers make financial decisions. After 18 months of industry discussions, the latest consultation paper makes this vision feel more attainable than ever.  

The buzz is palpable – whether in conferences or offices, colleagues are increasingly referencing targeted support. Respected industry voices are speaking positively about what the new regime can deliver…

But as someone who's been championing this initiative, I've paused to ask: Is this real? Can it truly deliver what people hope it will? Will it be able to fill the gap between basic guidance and individualised advice?

The accompanying consumer research by NMG Consulting offers an encouraging answer. It reinforces the case for why targeted support is needed while highlighting critical factors that will determine its success.

An expectation gap

The research is a clear summary of consumer behaviour when it comes to pension decision-making. Some parts are unsurprising – engagement will impact take-up and effectiveness; it will be most useful in and around retirement; and being free of charge removes barriers to trying it.

But dig deeper, and you'll find insights that reveal where success will be won or lost. These insights point to the essential aspects of experience design that could elevate targeted support from being merely useful to being transformational.

One standout finding is how targeted support fills the gap between consumer expectations and reality. Many customers already assume this level of help is available when they contact providers about retirement options. Targeted support meets a need that consumers are often surprised and disappointed isn't already met.

However, the research includes a caution - the promise of targeted support merely means that current expectations will be met, not exceeded. Great execution and industry innovation will be what makes it truly succeed.

Suggestions must be underpinned by sound financial planning principles

The research participants showed an appreciation of a difference between segment-based suggestions and fully individualised advice - the latter being the gold standard. However, some participants saw targeted support as a benchmark for comparison, rather than a guide to good practice.

Targeted support must avoid relying on the "wisdom of crowds". Instead, suggestions must be underpinned by sound financial planning principles to deliver better outcomes. This is a skill advice professionals have long mastered, but it's a capability that guidance providers will want to strengthen.

Balancing choice and control

Participants wanted to feel in control, they showed a preference for seeing a range of suggested options – they want the outcome that is right for them but that they feel in control of decision-making. The challenge lies in designing experiences that balance these needs.

We must overcome the major pitfalls guidance has today, a range of ‘you could' options creating decision paralysis, no action and no better outcome. Digital experiences must ‘frame and explain' what ‘you probably should do'.  By surfacing the most relevant suggestions prominently, these experiences can inspire trust and action.

The role of data and trust

Most digital experiences are founded on a value exchange, an investment of effort for something in return. The research showed participants' willingness to share more data if they could see the benefit: a more relevant, targeted suggestion. Trust will be crucial in driving this willingness. I see the potential for a new type of exchange – a ‘limitations exchange', authenticity in disclosing what hasn't been considered and how to get more help, could be equally as effective for building trust.

An upgrade to advice?

Ultimately, targeted support should in many cases act as a bridge to advice. The same data that powers tailored suggestions can lay the groundwork for fully individualised advice. Those that seamlessly connect these two levels of help will lead the way, creating further demand for advisers in the long run.

As final rules take shape in 2025, the industry has a unique opportunity to turn consumer expectations into reality. By exceeding those expectations and building trust, targeted support can become the game changer we've envisioned, helping people make better financial decisions and achieve better outcomes.