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Annuity firms face FCA probe as review exposes open market failure

by Michelle Abrego on Feb 14, 2014 at 07:13

Annuity firms face FCA probe as review exposes open market failure

The Financial Conduct Authority (FCA) is set to probe pension providers after its review into the annuity market found that 80% of consumers could secure a more generous retirement income by shopping around.

The regulator has found that up to 150,000 consumers every year could benefit from shopping around by as much as an extra £1,500, which if extrapolated could result in up to an extra £230 million boost to pension savings.

It found that 60% of consumers bought an annuity from their pension scheme provider and said that all annuities sold to existing customers were expected to be more profitable than those sold on the open market option.

The regulator launched a thematic review into the annuity markets in January 2013 with the aim of discovering the extent to which consumers miss out by not shopping around.

The FCA will now use its new competition powers to launch a market review to look into the conduct of pension providers, consumer behaviour and the structure of the retirement income market.

It will also look specifically at the role of providers’ role in shaping consumers’ decision making.

FCA chief executive Martin Wheatley said the regulator wanted to understand why people were not shopping around for an annuity.

‘The need to get an income in retirement unites us all. But once you’ve bought an annuity you can’t change your mind. For most people getting the right annuity could mean the equivalent of an extra £1,500 in savings – so we need to understand why they aren’t shopping around and switching,’ he said.

The regulator analysed data from 25 providers, out of a possible 31 that offer annuities. It said that for a pension pot of £17,700, consumers buying an annuity from their scheme provider would get an average income of £1,030 per year. However, a consumer using the open market option could increase their annual income by 6.8% or £71 a year.

It found that consumers eligible for enhanced annuities were also losing out.

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52 comments so far. Why not have your say?

Henry Tapper via mobile

Feb 14, 2014 at 07:36

It's not just seal clubbing from providers or sharp practice from brokers, people don't see why they should have to go through all this complicated nonsense. Can't say I blame them

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Steven Davies

Feb 14, 2014 at 08:11

£71 a year, wow that's worth it.

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Alex Morrison WM

Feb 14, 2014 at 08:12

Barring the usual fudging of the regulator, this should be good news for all.

Problem is, how do you fix this? Enforced shopping around? That means forcing an apathetic public to get in gear, find an adviser, pay them to go through hours and house of research so they can make an informed choice.

Sounds simple but, even as I type this, I can see a few wrinkles......

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Neil Walker

Feb 14, 2014 at 08:14

So just make it compulsory that pension providers do not accept business direct from the public and that they have to see an IFA.....

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Charles Rickards

Feb 14, 2014 at 08:19

You fix this by banning providers from quoting annuity amounts in maturity communications. The only things that should be communicated are available fund and the open market option. If the consumer then only asks their existing provider, that is consumer choice.

As far as the regulator not understanding goes, I am gobsmacked that they publicly admit that! But just to help out, the answer is route of least effort!

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Hugh Jars

Feb 14, 2014 at 08:25

Why cant the FCA and consumer groups just butt out. If the public can't be bothered to shop around, then don't blame the providers' literature.

Have they not stopped to think that the 150,000 who don't shop around each year, might be a similar type of person that doesn't bother to shop around for ;

gas/electric. Holiday insurance. Car insurance, best bank account. Savings account rates.....

Savings rates...now there's one .... how many people with savings are missing out on a damn sight more than £71 a year in interest because they can't be **sed to shop-around....

Where's the public outcry on that? where's the pressure put on savings providers to remind people that they might get a better rate elsewhere?

The public are generally lazy and apathetic, and too quick to blame the pension providers for complicated literature....

Got my gas and electric bill yesterday .... not that's what you call complicated,

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Honest IFA

Feb 14, 2014 at 08:26

Narrow research therefore pointless conclusion!!

Why are FCA are trying to blame the industry? Providers tell clients to shop around - it is there choice but with all the confusion and complication in the advised/non-advised market and the fact they have to pay FEES for advice is it a wonder they don't bother or aren't capable?

FCA - YOUR CAUSED THIS - YOU CANNOT NOW COMPLAIN ABOUT IT AND TRY TO PASS OFF THE BLAME TO THE INDUSTRY

We can shout until we are blue in the face but the idiots and self-serving consumer groups running the show are so far detached from reality it makes no difference and wont change anything.

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Roydo

Feb 14, 2014 at 08:42

Honest IFA has nailed it really.

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I'm an IFA - get me out of here

Feb 14, 2014 at 08:46

The problem is for those with small pension pots. The cost of advice would eliminate any advantage of shopping around. Reduce the regulatory burden on such advice & you might find a solution.

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robert c

Feb 14, 2014 at 08:48

I admit it - I've not changed energy supplier, I've not shopped around and I could be paying more than I need to - who's to blame?

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Julian Stevens

Feb 14, 2014 at 08:58

FCA chief executive Martin Wheatley said the regulator wanted to understand why people were not shopping around for an annuity.

For Wheatley to be admitting that the regulator doesn't know why people aren't shopping around beggars belief. Isn't it obvious? The reason is that the FCA, both in its latest and previous incarnations, has FAILED to mandate taking one's fund to the OM as the default option.

Providers should be barred from quoting any annuities at all, even those based on GAR's. All they should be allowed to do is point out that (if it does) the policy includes GAR's and that they may be better than the best alternative available in the OM. Everything in every near-to-retirement communication should major on the OMO.

The solution to the problem is SO straightforward that for the regulator to have FAILED to enact it and even now still to be claiming not to know why people aren't shopping around displays a truly extraordinary level of either ignorance or incompetence or downright negligence.

Why hasn't APFA been pushing the regulator to take action on this? Maybe it has but, as with so many other issues, its representations have just been ignored or brushed aside. APFA never tells us. So come on APFA ~ tell us now what you've tried to get done and how much, if any, progress you've made.

Not that it's likely to be of much practical value, but why hasn't the TSC raised this with the regulator? Again, maybe it has, but, if so, it wouldn't surprise me to learn that the regulator just gave it the brush-off with some vague undertaking about "looking into it". It's all just a pathetic little merry-go-round of questions with no meaningful answers.

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Knowledgable insider

Feb 14, 2014 at 09:00

How to protect consumers and make the whole process simpler? Easy ...get rid of the FCA and revert back to where we were pre RDR. This lot of charlatans exist purely to provide jobs for themselves and once they make a mess they create more work for themselves in clearing it up.

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Hugh Malcolm Morton

Feb 14, 2014 at 09:03

Well there's a surprise!! Most people, as said above, just don't bother to look but they also think it will be too expensive to ask for help and as for the comparison websites, does the regulator actually think they are only interested in helping the consumer or their own pockets?

Easy answer, let the paperwork for annuities be simple and the IFAs can then help at a lower cost. But don't ask us to go through all the compliance to get there.

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Hugh Jars

Feb 14, 2014 at 09:11

@I'm an IFA,

It depends on how you define a small pension pot,? and the systems/processes/profitability of the adviser firm

Real -life example: ( and I'm not being clever here) just a real case,

I'm seeing a woman this morning to sign up annuity, with a 'pot ' of £29,900. It's the 2nd meeting,- ( and carried out about 1hrs research work, standard and enhanced quotes since 1st meeting)

Many firms I'd guess wouldn't even consider seeing her.

She was 'quoted' by Royal London, a Prudential annuity, - without advice, 2 options- and no mention of any tax free cash.

Had she went with it- Royal London would receive £810 from Prudential - for doing nothing ( Well done FSA for engineering such a farcical situation ).

I've obtained enhanced rates, with the best arrangement for her- including tax free cash and dependant annuity etc.

I'm doing it for £500, - as the total time charge is just under 5 hrs.

That is very profitable business, for me, as a small firm with v low overheads, and streamlined processes.

Neil Walker at 8.15 is right....the public should not be allowed to deal direct with providers....

if that happened, and firms like mine were a natural 'channel' and turning round small cases, it would be manna from heaven, but most important of all the public would get a 'reasonable' chance of getting best advice.

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Old time trader

Feb 14, 2014 at 09:11

The FCA do not seem to realise that with small pots (probably up to £30,000) the cost of an OMO (ie adviser fees) outweigh the gain - ( I have personally advised clients to accept a lower annuity from their pension provider, rather than pay me a fee to find a better alternative) When will they admit that the people that suffer from their interference are those that they purportedly are trying to protect from those nasty IFA's

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Jonathan Kirby

Feb 14, 2014 at 09:19

And when people do shop around and try and do it themselves they will often end up with a worse outcome.

For example faced with £5,000 a year single life of £4,300 joint with two thirds widows, short term thinking takes over so they take the larger figure. But further down the line there will almost certainly be problems.

For current retirees at least there is the government safety net but once the flat rate state pension comes in even this will be gone.

People need advice but the cost (or sometimes the perceived cost) due to over-regulation has snowballed.

Time after time they start with good intentions and end up with the opposite outcome. Madness.

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David Ferguson

Feb 14, 2014 at 09:29

I'm afraid comparisons with utility providers or baked beans in Tesco are irrelevant. The typical individual has some grasp over those purchases - after all you don't get impaired life electricity deals or guarantee period and spouses benefit beans.

Nor is there much option over whether or not consumer electricity at all. How many people think that the slice of an annuity purchase which buys the income in the customer's 90th year should be fully invested in bonds / gilts for 25 years? Society, lifestyles, investment market and longevity have changed beyond recognition. These archaic products have not.

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Hugh Jars

Feb 14, 2014 at 09:29

@Old time trader,

We seem to contradict one another....

Perhaps one way the FCA could simplify it would be for all firms to put their cards on the table and declare themselves in /out of the annuity advice market.

That would mean those shopping around could be directed to a receptive adviser, and not waste any time on speaking to a firm not interested.

If opting- In, a specific examined qualification should be necessary....in the same way as G60 AF3 for Occ transfers.,

In my opinion the general pension qualifications don't cover the depths of annuity like they should, in what is potentially a very high risk area of business.

so in summary FCA- simplify the annuity market by 4 easy things.

Ban Non-advised commission being paid

Compulsory referral to independent advice.-

Compulsion on IFA's to declare themselves In or Out

A Standalone Annuity Qualification

If the public can't end up with a better 'Outcome' at the bottom of that, then I deserve a job in Canary Wharf

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Paul Howard

Feb 14, 2014 at 09:39

I think several people make some excelent comments

High Jars - your right - about £25.000 is the smallest pot, where the full cost of the adv ice can be met in most situations (£500) - as although it might have only taken you 5 hours to sign everything up - there is always the liability that she could complain in the future - and a single complaint would would put you into the red, even if the complaint isn't upheld.

So - what to do with a lower than £25,000 pot?

Change the rules - allow true limited advice and no ongoing liabillity - you could probably lower the pot size to about £20,000 before PCLS (around £300@2%) - client will still benefit and although not massively profitable, 3-4 hours work with no ongoing liability is probably profitable (just) for most firms.

Below a net £10,000 though - it comes even harder - £300 increases the fee to around a net 4% - and if the average gain is only 6.8% - thats not much - and the gain may not be there to pay the fee.

Provider Panel system - Providers can elect to join an OMO Panel - basically, provider puts in the clients details and which ever Panel Provider comes out top - sends out the retirement pack with two big notes

a) By fully shopping around the income may be better

b) If they smoke or have health conditions, they need to find an adviser

Problem is - that WILL hurt the Adviser market - as it will reduce the chance for an adviser to find a better rate (Net of fees etc)

Which takes us back to square 1.

How to avoid hurting the adviser market (which does benefit the consumer) without benefits some consumers, at the detriment to other consumers.

An extension of the limited advice market (with no ongoing liabillity) with a telephone based advice system - might be able to reduce the profit point to say £10,000 gross (£150 'fee') - but the net benefit to clients will remain so small - few may take it up - at gret expense to the advisiory firm.

Which leads to - could the trivality system be rebuilt? By reducing the Lifetime Allowance, the 1% rule has moves small pension pots back abive the trivality line - if the trivaility point was say a net £20,000 - it would resolve the bulk of the problems - as long as the individual receiving the triviality payment is reminded that 'money' needs to be used to support them in retirement - and not blown, so they fall back onto additioanl state benefits!

(i.e. If you spend it - tough, your choice was made and so you can't expect the Government to bail you out).

Tough, but it would be needed!

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Martinifa

Feb 14, 2014 at 09:43

Hugh Jars - You are correct it depends on the business model.

Small pots, for those that say it is not worth it, most cases there is an increase of £50 pa on standard annuities and on ill-health as much as 50% more,

If the correct advice is an annuity then the work involved is profitable to most at £500, which is our minimum. So even at £50 gain it is worth it, most of all because the client will understand and make the right choice for them, not just pick a box and the cost can be facilitated by the pension arrangement..

The one that really gets my back up is those providers that send their paperwork but do not supply the OMO paperwork. They make the client request it, putting a further barrier between the client and a better result, which to my mind is as underhanded as you can get.

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Chris Miller

Feb 14, 2014 at 09:45

So Wheatley says explicitly he ' wants to understand why people were not shopping around for an annuity'.

Seriously, is this chap fit for purpose as 'the man at the helm', when he needs to ask this question?.

In terms of understanding the financial services sector, he is a toddler.

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Andrew Moreton

Feb 14, 2014 at 10:09

From the FCA's website this morning:

"What were our findings? Overall our results indicate that some parts of the annuities market are not working well for some consumers. We found that eight out of ten consumers who purchase their annuity from their existing provider could get a better deal on the open market."

Whilst 8/10 might find a better deal this is surely irrelevant unless it is "significantly" or "worthwhile" better deal? Even in their example (the average pension pot being under the triviality trigger in any case) £71 gross per year nets down to £4.71 a month.

Better, the next para from the FCA says:

"What are the next steps? Based on this review, we believe that it is appropriate for us to undertake a competition market study into retirement income."

Reminds me of the (possibly) apocryphal tale of East German roadworkers digging holes for the next batch of workers to fill them in.

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Jonathan Kirby

Feb 14, 2014 at 10:13

To add to the above, annuities could be done cheaply enough even for small pots. Software such as O&M do excellent comparison reports which graphically show the alternatives with fund return dates and crossover points.

The amount of information needed is minimal and the time taken very little but clients needed to be questioned and guided as to the most suitable options.

If we could simply use these without a 10 or 15 page lecture on every option under the sun which will never be read let alone understood, then you could do several cases a day.

As it is everything takes a day at least of your time.

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Keith Cobby

Feb 14, 2014 at 10:27

I agree with Hugh Jars original post. If people can understand and change their energy supplier they can understand annuities.

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James

Feb 14, 2014 at 10:33

The government should subsidize the cost of the advice by giving retirees a voucher to be offset against the adviser fee, which the adviser can then reclaim. That will make advice on small pots more viable.

Then ban direct from provider annuity sales.

Then cut down the amount of guff that has to be included in the suitability report - if the total retirement pot is less than say £80k, then is there any need to talk about drawdown etc?

With a streamlined model, a change in the rules and some subsidy (they're happy giving away free bus passes to the over 60s), then people will get the right advice and solution and be less of a burden on the state.

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David Ferguson

Feb 14, 2014 at 10:35

How many people commit to a 30-yr decision on their utility suppliers?

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Old time trader

Feb 14, 2014 at 10:51

@Huge Jars

I think you misunderstand me: where a true benefit can be gained (after fees) eg and enhanced annuity, / more suitable shape etc, then thats fine: but for the FCA to imply that a 7% gain in a £1,000 annuity is worth seeking Independant Financial advice for is ludicrous - in that case it would take the client 7 1/2 years to see the benefit ( and if the £500 fee was taken out of the pot, the advantage would be reduced to only 4% gain- in the example above 77p per week)

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Philip Wise

Feb 14, 2014 at 11:17

What a bunch of old miseries. It might be raining but what happened to PMA

Thanks for doing the hard work for us, FCA, we'll now be using it to market our services

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Charles Rickards

Feb 14, 2014 at 11:18

What is the outcome being sort for consumers? For those who choose the DIY route, it must be clear, easy to understand information about the options available. This makes for a potentially large document, that probably won't be read, due to its size! For those who seek advice, they are relying on an expert to help them understand their needs and the best solution for meeting those needs. Whilst this story is about Annuities, they are not the only retirement solution available.

The right outcome is the one which is most suitable for the consumer's circumstances.

I am sure for an appropriate fee, a group of us could put together a suitable and workable solution to solve the regulator's concerns.

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Julian Stevens

Feb 14, 2014 at 11:35

Being sort for consumers? Really, Charles.

That aside, provided they're properly informed of the risks, those who choose the DIY route aren't our problem ~ on their heads be it.

The whole thrust of all pre-retirement packs should be SEEK ADVICE, nothing more and nothing less.

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Richard Arnold

Feb 14, 2014 at 11:54

Never ceased to be amazed that the findings of a "Themeatic Review" by the regulator is the discovery of the "fundamentaly obvious" to most people in the industry.

At the heart of this is 3 lessons to be understood by the regulator and this is applicable to the market place in general and needs to be done in the front of a mirror.

Consumer apathy.

They need advice and "motivation".

Confusion.

Bloated Regulatory and compliance focused paperwork in maturity packs. Shameful !

Cost perception.

Main reason why theres consumer apathy. The vicious circle.

A high proportion of the above can find its roots in a regulator that consistently persued a mantra of being a "World class regulator" rather than a regulator of a "world class retail finacial marketplace" ie the UK. Government and politicians have very little understanding at grass roots and as such are incapable of measuring the ineptitude and consequence of a regulator that is accountable to no one.

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Karen M Sutton

Feb 14, 2014 at 12:06

Julian's SEEK ADVICE: absolutely, simples.

I've seen only one client above the triviality rules that I couldn't get more for after my £500 min. they chose my service anyway, figuring (correctly i believe) that the slight loss was well worth it, for peace of mind at very least. I think the importance of that gets missed by the industry.

for everyday people us IFAs are scary...until they see me anyway!

&, well-off peeps, any little extra when you've not got enough is a lot.

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Dan Rear

Feb 14, 2014 at 12:22

Just heard the news on the awful Radio 5 Dead, the headline, of course, is summat like "Pension Companies Ripping Off customers...".

Just what the whole Pension world needs, be it the FCA, Providers, Govt,, Advisers, the AE Process, etc. When will the FCA ever realise the results of its pronouncements

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Alan Lakey

Feb 14, 2014 at 12:45

@ Richard Arnold

In one pithy post you have established all of the woes and regulatory foolishness that the industry and its participants are subject to.

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Jon Gwinnett

Feb 14, 2014 at 14:00

To those advocating seek advice as the first and last, I think that only works if the industry starts to do more pro bono work in this field.

Small pots need advice, and many of those pots are way below the minimums people above talk about as economic for advice. It might be that all those people would be best served by trivial commutation, but that's not a given. (And I agree the triviality rules are too onerous, why make it only available if you take all benefits in a 12 month window. surely people could take various small pots spread over years to advantage.)

The first person to market with a true online advice system (i.e. not just guided) and not funded by commission will be onto a winner, or least until the whole system comes crashing down round our ears.

As David says, you don’t commit to your energy supplier for 30 years. Annuity purchase asks you to make that commitment. Steve Webb was wrong to think that moveable annuities were the answer, but some combination of drawdown (perhaps on a collective model as advocated by Henry Tapper and others) and staging annuity purchase would work better for a majority of consumers.

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Dave Knight

Feb 14, 2014 at 14:45

I fully concur with many of the comments above, but feel that the vast majority of comments on this subject seem to centre around advisors business models, profitability, and whether or not a "simoplified" low cost model could work. However, i think this is missing the point, so let's go back to what the FCA is really saying, and it's nothing to do with advisers!

Their comments are aimed at PROVIDERS, and the processes around notifying clients about maturities. A secondary issue is about VALUE FOR MONEY, implying that the companies paying poor annuity rates don't actually offer this feature. This, I think, is where they don't really get any grasp of commercial reality.

Annuities may be profitable, but not in all cases. Some companies deliberately skew their rates in order to be uncompetitive because they don't want such business, particularly in relation to small funds, where the cost of processing etc is proportionately higher. Such "rate engineering" can occur for several reasons, some of which are related to the business mix of the company. Some have to be careful that they don't weight their overall business too heavily in favour of annuities, but you'd need to talk to an actuary about that subject.

Others sometinmes, for instance, find that they have unusually large volumes of business and are snowed under, so temporarily reduce rates to stem the tide of incoming cases while they perhaps clear a backlog.

Others may be closed to new business, so don't really want it at all, but have to to satisfy regulations. Answer, quote low rates.

None of these things may be admitted, and you sometimes have to read between the lines, but they do happen, and when they do, and their client with a maturity just takes their offer anyway because they can't be @rsed to get out of their chair to look elsewhere then they have to accept the business, however reluctantly.

And you can't blame "profiteering" life companies for offering crap rates when legislation forces them to buy Gilts and Invt Grade Corp Bonds to provide the long term asset backing required. There are other options (Unit Linked, Enhanced, 3rd Way, Drawdown etc etc) but it's not these the FSA are getting at, it's the straightforward conventional guaranteed lifetime annuity.

Don't blame advisers for not wanting to deal with £10k pots (I've turned several clients away telling them it's not worth my cost) or providers for having to buy Gilts.

Blame consumers for not bothering to look, and blame the legislation.

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Chris Miller

Feb 14, 2014 at 15:16

@ James

Good concept, but.....

Q. Guess where the money for the voucher would come from?

A. Another levy

The cows are in the milking parlour... pop on another cluster; job done.

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Jonathan Kirby

Feb 14, 2014 at 16:14

@ Jon Gwinnett

You can't do pro bono work.

The rules require full advice and reporting even if you don't charge.

Now I'm a kind and generous sort of person but I have far too much to do without working for free.

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Julian Stevens

Feb 14, 2014 at 16:43

What's worse than working for free with full and open-ended liability for your advice?

Paying an ever increasing slice of your turnover to a profligate, incompetent and unaccountable regulator who'll seize every and any opportunity to hold you financially liable for everybody else's advice.

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richard john brydon

Feb 14, 2014 at 18:24

Annuitants have been cheated for years and the regulators knew, as they have been told by financial advisors what was going on, just as they did with so many other issues and chose to do nothing about it. They have just joined the bandwagon and will try to convince politicians and the public that they are doing their job. It's as if the FCA, or whichever regulator was in power over the years, that they have just uncovered a mis-selling scandal and, like in the westerns, they are the cavalry coming to save us all. Double headers, is an expression used around here as definitely apt.

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Ed Fairey

Feb 14, 2014 at 19:21

Fellow IFAs this is what the non advised sales lot in Leeds send to enquirers:

Good afternoon,

In response to your email query;

Age Partnership provide an online calculator in order for you to work out an approximate return on your pension savings. From this, we also have an experienced team of Annuity specialists who will guide you through a comprehensive quotation in order to support your decision making.

We cannot provide advice and therefore will only guide you through your options.

We specialise in conventional annuities whereby the income is set for life.

Following all quotations, we will always send you through a full illustration covering every aspect of the call clearly detailing how much you will receive, the provider and importantly, how much we would earn.

On the subject of commission, we will receive a one off commission from the chosen provider if you choose to complete the application forms and agree to proceed. The commission we received will always be calculated into the rates by the provider and comes from the invested funds which means there is no additional payments you make. Further to this, we do not receive any future payments.

There are advantages and disadvantages of using either Financial advisors or ourselves.

By using an IFA, you can review all pension products to determine which is more suitable to you. You also have the added benefit of sitting with someone who can advise.

However, you may end up with a product you do not understand of felt pressured to take. The IFA will also charge you a fee and may hold you to this if you do not proceed. You may also end up with a product which requires a review in 5/10 years and therefore your advisor can charge you again.

Using Age Partnership we only look at conventional annuities which mean they are guaranteed for life and cannot be altered at a later stage. This means we have concentrated knowledge of one particular market which is why we are one of the leading Annuity brokers. We cannot however discuss other options in the market.

Finally, as mentioned earlier, we will only earn commission if you choose to sign an application and proceed. Up until that point, we offer a free service!!!!

Finally, if you proceeded through Age Partnership, we have a dedicated admin team who complete and liaise on your behalf to make the whole process smooth.

If you would like to speak to an Annuity specialist and receive a no obligation quotation, please let me know and I can organise for someone to contact you.

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Dan Rear

Feb 14, 2014 at 20:19

Can we PLEASE stop using the phrase "pension pots". Pots are what I use to make my tea in. Policies/plans/schemes, vehicles even, are what I use to encourage my clients to save for their retirement. At which point I'll do my best to give them the correct, or right but NEVER "appropriate" advice.

And Karen, I don't have a minimum charge, £500 indeed...

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I'm an IFA - get me out of here

Feb 14, 2014 at 22:09

@Dan Rear

I'm interested to know how you can afford to give advice for less than £500. Perhaps I'm doing more than I need. Please do tell.

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Hugh Jars

Feb 14, 2014 at 23:52

Karen M Sutton,

I believe, sorry- Bleeve U mast bea Russhan slipped-in by Mourhinho or abramovich- No? from Eastan-Blok,

Do you really construct your suitability ( or otherwise) with that kind of text/grammar?

then again, -maybe you are simply a ourno-grenade thrown into the blog by Citywire..just to keep the incendiaries pooping?

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Dan Rear

Feb 15, 2014 at 09:58

Low overheads, lots of clients, don't drive a Merc/Beemer/Silly psuedo 4x4, good income built up on trail over 15 + years, no debts. Quite simple really.

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nugget

Feb 16, 2014 at 10:22

People with an average pot of £17000 will not, Mr Wheatley , shop around to achieve a £71 pa ( 1.36 per week!!! ) increase ! Even if they do, there is a plethora of paperwork to complete and yet further delays incurred, which to most individuals is unacceptable. In addition , it is not worth the IFAs' time to spend hours on the case to earn approximately £200 quid. Even if the IFA can justify and secure an additional fee to cover his extra work, assuming the client has the means to do so ( which is pretty unlikely ) , then the fee swallows up the first few years of what the poor old punter has managed to get extra, by shopping around , then HMRC will probably deduct 20% tax for however, long!! No wonder folks aren't interested in pensions any longer !! Has Mr Wheatley actually asked someone with a 17k pension pot what the issues are.

Why not increase the triviality limit to 40k and let people have the funds . I have a number of non- regulated cash investments which I have selected , of my own volition which are providing substantially better returns , than what is available with an annuity, so I will take my chances outside of any FSCS /FOS protection!!

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Jonathan Kirby

Feb 17, 2014 at 09:17

@ Ed Fairey

That's truly appalling.

Furthermore, it is untruthful and extremely misleading.

Do the FCA know about this?

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Ed Fairey

Feb 17, 2014 at 10:55

@ Jonathan Kirby. Verbally their sales peoples best line is don't use an IFA they charge fees. Of course we all know fees and commission are the same.

I haven't reported this to the FCA as they are the architects of this sloping playing field!

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Jonathan Kirby

Feb 17, 2014 at 12:24

@ Ed Fairey

In the interests of balance do they also go on to say that if you buy from them it is Caveat Emptor and if they buy from an IFA they have protection for life?

I hope the FCA are monitoring these pages and take note.

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Julian Stevens

Feb 17, 2014 at 12:43

Sure they're monitoring these pages but experience sadly tells us that even if they take note, virtually never do they take action.

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Adam Carnall

Feb 18, 2014 at 15:43

@ Ed Farey

Please see below a copy of my response to your comments which have been copied in another Citywire article today. I would be interested in talking to you further about this as this certainly concerns us as I have outlined below.

http://www.citywire.co.uk/new-model-adviser/fca-annuities-review-is-a-chance-to-spike-sharp-practices/a734597?ref=rebecca-prestage

Thank you for bringing this to our attention. On the basis that we offer an advice service in addition to our non-advised service, it is not in our interests, and certainly not our policy, to make these types of comments to customers.

We are undertaking a thorough investigation and I will report back personally on our findings. I can confirm however that the communication you have highlighted doesn't appear on any of our marketing literature or our website.

Kind Regards

Adam Carnall

Age Partnership Ltd

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Ed Fairey

Feb 18, 2014 at 16:34

@ Adam Carnall the email I referred to was automatically generated moments after inputting a spurious enquiry into your Iress powered annuity quote tool. It therefore does form part of your marketing communication and is not down to some random employee taking matters into their own hands. I am pleased however that you're taking matters seriously.

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