Aviva channels small pensions to rival firms
Share
Aviva is set to channel customers with pension pots worth less than £30,000 to an annuity referral service which will search for the best deal from a panel of rival providers.
Money Marketing revealed in May that Aviva was keen to offer other providers’ annuities to customers with small pots.
Aviva has piloted the model with new retail customers and is extending the service to its maturing pension customers. It insists it checks customers do not have an existing financial adviser before referring them.
Referral service The Annuity Team has also signed referral deals with Paradigm and lead-generator Exchange Media and is looking for new partners.
Customers are guided through their annuity options and offered rates from a panel including Aviva, Aegon, Prudential, Canada Life, Legal & General and Partnership Assurance. A quarter of all customers referred to date have received an enhanced rate, according to The Annuity Team.
Aviva takes a cut of the commission The Annuity Team receives from the chosen provider but neither would disclose the percentage.
Aviva annuity business director Clive Bolton says: “As an industry we have neglected people with average-sized pots.
“Seventy per cent of pension funds are under £35,000 so we think this is close to the heart of the reputation of the industry. We need to get this right.”
The Annuity Team chief executive John Mamelok says: “Smaller pots might not be commercially viable but we have a low cost base so it is mutually beneficial for firms to refer cases to us. The service enables customers to select the most suitable option at a better rate.”
Annuity Exchange director Stuart Bayliss says: “It is good news. It is Aviva beginning to do what they said they would do with car insurance, where if you get a better quote with someone else they will do the business with them. This is a way of enabling that to happen with smaller annuity cases.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (6)
Simon Webster | 2 Dec 2009 10:27 am
Not surpsied we are having horrors with Avivia on a sereis of group pension switches. They just can't cope
Unsuitable or offensive? Report this comment
Phil Castle | 2 Dec 2009 10:43 am
If AVIVA spent their time lobying for the Govt to take a view and then the Trivial Pension limit to be increased to 3% that would be even better..................
Unsuitable or offensive? Report this comment
Anonymous | 2 Dec 2009 11:21 am
Surely Aviva have strayed into 'Giving advice' with this service and is another nail in the coffin for Independent Advice. Anyone who gives advice in this market knows that it is not all about the rate, but the most suitable type of annuity, even with smaller pots. Are these people really qualified to give such Advice?
Unsuitable or offensive? Report this comment
Sean | 2 Dec 2009 12:23 pm
I hope that Aviva will not be earning commission from these other providers. If so are they giving advice. I sincerely hope that they are not doing this when the client has a financial adviser.
Unsuitable or offensive? Report this comment
bill wells | 3 Dec 2009 4:08 pm
Aviva are taking a commission split ! This is totally unacceptable given that they are required to provide a client with options at retirement, including making the client aware of OMO.
If they are approaching clients before NRD then a whole can of worms is being opened and the FSA should take immediate action to ensure that all the rules which IFAs have to follow are not being conveniently ignored by this brazenly incompetent company (Aviva).
And, if anyone believes that clients with advisers will not be contacted by Aviva then they must be living in cloud cuckoo land.
Unsuitable or offensive? Report this comment
paul | 4 Dec 2009 9:24 am
Come along now FSA.......how does this fit in with your interpretation of TREATING CUSTOMERS FAIRLY?
Unsuitable or offensive? Report this comment