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ABI: Annuity brokers should sign up to minimum standards

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The Association of British Insurers has put pressure on non-advised annuity brokers to agree a set of quality standards similar to its shopping around code of conduct after MP Frank Field raised concerns the market is “operating as a cartel”.

Last month, Money Marketing revealed Field, a former Labour welfare minister, had written to the Office of Fair Trading raising concerns the non-advised annuity brokerage market is not competitive.

In response to the article, Annuity Line head of business development Billy Burrows insisted the annuity brokerage market is competitive and called for the creation of a code of practice to ensure investors are “fully informed” about their retirement options.

ABI head of savings, retirement and social care Dr Yvonne Braun says: “Billy Burrows rightly points out that people need to consider all their annuity options but his call for a code of best practice has already been acted on by providers through the ABI’s retirement choices code. 

“Annuity brokers signing up to similar standards would be a welcome move. 

“The ABI code will improve customers’ confidence in making the right pensions choice through insurers providing clear and timely information to people approaching retirement understand what their options are, and the different ways they can take their pension, as well as encouraging them to shop around for the right pension deal.”

Annuity Direct chief executive Alan Higham says: “We need minimum standards for annuity brokers.

“There is inadequate regulation around non-advised sales and there are a lot of issues when buying an annuity which can be confusing.

“Minimum standards would help ensure customers are better protected.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Like it or not intermediaries, providers, advisers etc. are all viewed as one and the same by the general public. Instead of spending time criticising other areas of finance, all parties should continue to make sure their own house is in order. In this way a collective, positive message can be issued to retirees, leading to a more trusted and vibrant retirement market.

  2. Minimum Standards,code of conduct. Dont we already have this with the FCA. Perhaps we should bring annuities in to the advice world like all other important financial decisions in a persons life and get qualified advisers to be offering advice to these people when they need it most. Not call centre, sales hungry kids who want to earn a fast buck and are not qualified.

    Sure the big guys get slightly better rates because they are all in bed together but compare an experienced adviser to a junior salesman and even with those slightly better rates the experienced adviser should be coming out on top in overall value.

  3. What this article didn’t explain, is that the Specialist At Retirement Adviser group (see Linked In) collaborated and agreed to a voluntary code of conduct in principle. We engaged with SOLLA to administer this and a draft standard was produced last year. The aim was to have 2000+ accredited at retirement advisers all suitable to go on a national directory. PICA objected to this and insisted they would launch a directory with no minimum standard required. ABI were happy to let this initiative of a code for advisers/brokers die on the vine. PICA are no white knight here.

    If the ABI would commit to referencing a directory of suitable advisers (ie ones who meet this minimum code) then this could all be in place in weeks. The website http://www.expertretirementhelp.co.uk was created last summer.

    The first I heard that the ABI have had a change of heart on this topic was being contacted by Tom Selby at Money Marketing.

    Message to Yvonne Braun: if this isn’t just PR and the ABI wants to support a code for advisers/brokers then it is easy to implement if there’s a real will.

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