How OMO could help advisers enter execution-only space

As usual everyone is focussed on placing the annuity. The real work is in looking at the ceding scheme to establish if there are any issues - good and bad. This is a pension switch and so anyone not looking at the ceding scheme could have a very interesting conversation with the FSA judging by their appproach to pre retirement switches!

Providers need to speed up their response to enquires about the ceding scheme. That would make the biggest difference to the process.

Agree with Bob here.

Although I am a strong supporter of PICA and its attempts to stop self interested ABI members from blocking full use of OMOs, I disagree with Tom on the idea of execution only annuities. Shopping around for yourself is easy if you don't mind getting the wrong product. If you didn't know there were deisel cars you might get the cheapest petrol one (note cheapest, not best).

Why did so many people put theie money with Equitable? Because they thought they could get something for nothing!

Totally agree with Bob, getting the information on the ceding schemes is woefully slow and inefficient on average it takes me 2-3 weeks, by the time I have had to go back three times to get the correct information. How hard can it be? If I hear 5 working days for an OMO form again, i will scream!!! Standard life can provide the info in 2hrs, so why can't everyone else? Recently quoted 6 weeks by one provider......woefull!

I agree with the 3 posters above. My experinces have been the same.

Why can Standard Life do it all on a phone call and others need to replace their tortoise.... with a mouse and that often includes big name insurers.

Absolutely correct! Additionally, are even slower when providing the correct forms to allow for multiple pensions to be transferred into one annuity.

This is a common procedure and is hardly rocket science.

Again Standard Life stand out as their simple, admin-light procedures again allow for such advise to progress smoothly.

Bob and others are spot on.

The comparison quotes are useful only if you know what you want, what it means and is right for your circumstances (which our evidence suggests is few and far between). Likewise ensuring that you (as an Execution only client) don't trip yourself up over GAR's, penalties, protected TFC, etc. is not for the faint hearted. Then, as mentioned before, is asking the ceding scheme for info....what a joke! Finally, the chance of the potential annuitant getting all the paperwork correct is not high (as many advisers get it regularly wrong who are not familiar with it).

I would welcome a push towards an Origo Options type service for accessing scheme information to base advice/decision upon. This might help a simplified advice type process to operate within the cost/fee constraints of a less wealthy client.

Finally, in addition to pushing greater OMO awareness I would welcome an increase in education that annuities may be a simple product but the journey to getting one is fraught with dangers from their historic pension schemes. In short take advice...if we (the adviser profession) can deliver it at an accessible price.

Why so much focus on something so unimportant.

Before the consumer can start shopping around, they need to know:

1. Whether they should take their pension benefits (and when the best time is to take benefits)

2. How much tax free cash they should take

3. Whether they should buy an annuity or take a different option

4. What type of annuity they should buy

Then they can work out whether they are better off shopping around. It would be a good idea if providers could explain how their pensions work and not have to have this explained to them by IFAs (ever tried to look at benefits on a with profits deferred annuity or with profits cash accumulation fund - Prudential, L&G, Phoenix and MGM appear to have no idea of how these contracts work)

Once they have decided to shop around, then the choice of annuity might make a difference. But no amount of shopping around will make up for getting the answers to the other questions.

The reason that there are so many pension options is because successive governments have opted to give consumers choice over how to deal with their pensions, as opposed to keeping things simple. It's up to government to work out how to make it possible for the average person to afford to take the advice they need in order to make the most of the pensions they have saved for.

And I agree with the other posters - he amount of time taken to get answers about existing contracts is unacceptable. The older the contract, the poorer the quality of information. But the worst culprits arent the life companies. The benefits consultancies, such as Mercers, are consistently the slowest, and least helpful.