Adviser ‘left in the dark’ as AXA drags its heels on critical yield updates

AXA has been criticised for refusing to join peers including stable-mate Winterthur in providing critical yield updates for income drawdown clients.

The majority of providers including Winterthur, Standard Life, Scottish Widows and Aegon Scottish Equitable provide regular critical yield information for advisers with clients in income drawdown, which allows them to measure the returns needed to provide an agreed pension income.

But Paul Richardson (pictured), managing director of Surrey based Concept Financial Planning, said AXA leaves him in the dark when it comes to deciding on client’s investments as he cannot confirm whether income drawdown is still suitable and whether further action is needed to make up expected shortfalls in the value of the pension.

‘If you want income later on they don’t have the systems in place to be able to provide that,’ he said.

‘Three years, four years down the line it could be a lot different than the original critical yield. You could potentially be down 5-6%.’

Richardson wrote to the company and was told it could not provide updates ‘due to the amount of further calculations that would need to be done if a projection was calculated part way through a year and we do not currently have the systems to provide these calculations.’

It added that the company was looking into introducing this option but could not give a time scale.

An AXA Winterthur spokeswoman said the discrepancy between the two firms’ services was the result of a decision made by them both in 2006 before AXA acquired Winterthur.