Other Citywire websites
Stay connected:

View the article online at http://citywire.co.uk/new-model-adviser/article/a661552

ABI unveils code of conduct to promote shopping around

by Brian Cantwell on Feb 26, 2013 at 10:12

ABI unveils code of conduct to promote shopping around

The Association of British Insurers (ABI) has launched a code of conduct which aims to force providers to do more to help consumers get the best possible annuity.

The much trailed code will force providers to start giving consumers information about pension options two years before they are due to retire, and encourage shopping around.

The code, which must be adhered to by ABI members, aims to help 400,000 people who buy an annuity each year better understand their options at retirement, choose the right annuity and shop around for the best deal, through information provided by insurers.

The ABI said it would monitor the effectiveness of the code and review its impact in 2014.

The trade body will also publish specimen annuity rates offered by a range of different providers.

The code won praise from economic secretary to the treasury Sajid Javid who said it was necessary to boost trust in pensions.

'We need to continue to work together to improve the pensions landscape' he said. 'I have been impressed by the way so many stakeholders in the pensions industry have come together to focus on the issues facing consumers.'

However, Tom McPhail, Hargreaves Lansdown head of pensions research, who is also chairman of open market option campaign group the Pensions Income Choice Association, said the code should have gone further and made shopping around for an annuity the default option for retirees.

‘I would still like people take their pot out into the market to shop around,' he said. ‘We now have something to build on.’

Otto Thoresen (pictured), ABI director general, said the code would help people make decision with more confidence.

‘This code is the latest initiative in the industry’s commitment to helping meet customers changing pension needs,’ he said. ‘The timely, clear and relevant information provided under the code will significantly increase the number of people reaching retirement with the confidence to make the right pension decision.’

3 comments so far. Why not have your say?

Philip H

Feb 26, 2013 at 12:44

Not wanting to be protectionist but why is the whole sector that is geared to provide solutions for people at retirement excluded from this conversation - again. An ABI voluntary code applauded by know -nothing govt ministers should set off alarm bells by default, yet there is no-one to challenge it.

It appears that the ABI is content to give people the "confidence to make the right pension decision" as it will bypass most and fall into the insurers hands again. As an example, for people with health issues, there is little chance to shop around post underwriting unless you use an IFA service. Why are we omitted from every discussion on this, or not even considered? Because insurers make more money out of it and govt looks like it has done something yet doesn't have to rock the boat...

report this

Julian Stevens

Feb 27, 2013 at 09:10

I simply cannot understand why the government, the FSA and the ABI have been faffing about with this issue for 20 years or more. Just make taking one's fund/s to the OM the default option and have done with it. Make it mandatory for all pre-retirement packs to include a brightly coloured laminated sheet stating unequivocally and unambiguously that You now need to seek out independent advice on the most suitable and best value option/s available in the Open Market for deploying your fund. Whatever justification can there be for anything else?

report this

BGM

Feb 27, 2013 at 09:19

And, as aquid pro quo, make it mandatory for advisers to have to deal with pots irrespective of size when asked, with a charge limited to no more than 1 months worth of resultant annuity, otherwise customers could find many years worth of any benefit eaten up by the resultant adviser charge.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Opportunities emerge as production moves back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

A spotlight on Alastair Mundy


Alastair Mundy met Citywire's Daniel Grote at the London Stock Exchange Studios for a detailed interview about the Investec Cautious Managed fund.

More about this article:

Archive


Read more...

Adviser Workshop: How to implement a fixed-fee model

by Jun Merrett on Jul 22, 2014 at 14:38

Sorry, this link is not
quite ready yet