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ABI looks at Omo wealth warnings for marketing

The Association of British Insurers is understood to be considering introducing cigarette-packet-style warnings on pension provider marketing material to encourage more people to exercise their open market option.

The news comes as the Department for Work and Pensions looks set to publish more damning research of provider Omo material following recent FSA research that found 40 per cent of material failed to meet regulatory requirements.

The DWP research, which is set to be published this week, found consumer misunderstanding over the annuitisation process.

The DWP will recommend a clearer and more timely provision of information from providers, including a single document explaining key decisions and increased awareness of the need for independent financial advice.

The ABI is expected to release a new code of practice on Omo in the next two weeks which will include a new template wording for wake-up letters. It is believed the code could feature warnings such as “failing to shop around for an annuity could damage your wealth”.

An ABI spokesman says: “Insurers can use our wording exactly or they can adapt it to their own house style. The letter aims to be succinct and clear.”

Lowland Financial managing director Graeme Mitchell says: “It would be useful to have a simple message that says look at alternatives, get some help and do not take the first thing on offer. Anything that helps improve people’s awareness and points them in the direction of advice is a positive thing.”

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