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.”