Carefully designed prompts can have a significant impact on consumer behaviour and encourage retirees to shop around when buying an annuity, an experiment run by the regulator has concluded.
The Financial Conduct Authority (FCA) employed research specialists Oxera and the Nuffield Centre for Experimental Social Sciences to conduct an experiment on 1,996 willing participants to find out what really stops people leaving their pension provider when buying an annuity. The study, Increasing consumer engagement in the annuities market: Can prompts raise shopping around?, said providers should include specified prompts to clients to get them to properly think through their decision. The paper said: "Overall, the results provide evidence that carefully designed prompts can have a...
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