The Regulator's Perspective

Behavioural insights play a key role in the regulation of the financial services industry and have the potential to impact many aspects of later life financial planning. 

The Behavioural Economics and Data Science Unit (now the behavioural Economics and Design Unit) published a series of ‘Occasional Papers’ on this subject. The FCA also publishes research and articles on behavioural economics as part of ‘Insight’, a research project they developed to help financial markets work effectively.

The FCA’s concerned about the impact of behavioural bias on vulnerable clients, and in July 2020, noted that vulnerable clients ‘may have more behavioural biases that negatively impact their decision making’.

In July 2022, the FCA published an updated FG22/5 Final non-Handbook Guidance for firms on the Consumer Duty, outlining the principles and examples of good practice and avoidance of actions exploiting behavioural biases. 

Oxford Risk’s 2023 Suitable Drawdown White Paper explores how behavioural factors influence client outcomes in terms of support, suitability for and amount of guaranteed income and suitable investment risks.