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ABI’s 30-day transfer target misses the point

The Association of British Insurers’ 30-day target for transferring pension fund has been criticised by advisers.
The Retirement Adviser director of retirement planning Nick Flynn said it was ridiculous that while some firms would guarantee a quote for an annuity for two or three weeks, the failure of other firms to transfer funds on time left those quotes redundant. “On one hand, you are offering 30 days to move the money and on the other, most insurers are promising people two or three week guarantees. You are promising the client something they cannot have because the rates are going to move,” he said.

He also asked why some providers who could transfer much faster should have to tolerate an agreement that set the bar much lower.

Annuity Direct director Stuart Bayliss wanted to know what is meant by 30 days. He said: “What starts the 30 days? That is one of the problems. I read the ABI report and do not understand it but I fear it is when an insurer receives the application form, the complete application form. What does complete mean? With a discharge. From the client’s point of view, their 30 days starts when they last received any income.”

Norwich Union head of annuity propositions Darren Dicks said: “In the FSA’s report this year, the Omo work got publicised but the other part was on transfers. I would not be surprised if they focused on the transfers next. I accept it should be quicker but let us try and get it to 30 and then we will see.”

Prudential director of annuities Karin Brown said: “My take is that it will help the industry and will allow the FSA to find the outliers who are well beyond that. I think it is a great step forward but better companies will do much better.”

Burrows added: “Clients cannot understand why they can transfer money online from the bank but not from insurers. What is the difference? It is a pot of money. But it is wrapped round in all these rules. We have to get the form countersigned – NU and Canada Life have to sign a form saying they are a bona fide insurance company. Isn’t that nonsense?”

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