framing
‘How a choice is presented affects the decision consumers will make’
One of the obvious examples in the retirement market is the positioning of annuities.
FCA research revealed that when presented as a form of insurance, 66% of consumers preferred an annuity to a savings account. When presented as an investment product only 17% chose the annuity. (‘Does the framing of retirement income options matter?’, 2014, FCA).
action
There are a number of actions you can take:
- Present annuities as an insurance product – ‘however long you live you’ll be guaranteed an income every year’.
- Watch the ‘a’ word. It has been discredited (we call it a ‘guaranteed income for life’).
- Emphasise the death benefit options (if leaving a legacy is an issue). Remember clients can now buy a ‘money back guarantee’ (100% value protection).