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Aviva to push Mark Hoban for Omo reforms

Aviva is preparing to ramp-up the pressure on Government to make shopping around for an annuity the default option for savers.

In its ‘Rethinking Retirement’ report, published in June, the provider urged policymakers to implement a series of reforms designed to increase the number of people who shop around for an annuity at retirement.

However, it stopped short of calling for legislative changes.

Speaking to Money Marketing, Aviva UK Life chief executive David Barral (pictured) says: “Customers are losing millions by not shopping around for an annuity. The numbers who shop around are increasing but we don’t think it’s anywhere near where it needs to be.

“I’m seeing Mark Hoban in the next two or three weeks to discuss this issue specifically.

“We are going to push for the open market option to be the default for investors. I would rather have seen the industry sort this out, but it hasn’t.

“If we are going to build confidence and trust among consumers then they should absolutely be shopping around.”

The Association of British Insurers has resisted calls for legislative reform, instead preferring to focus on improving the quality of information provided by insurers at retirement. This included the launch of a ‘best practice’ guide for providers in January.

The Department for Work and Pensions-led Omo stakeholder working group, appointed by the Treasury, is currently assessing the practical steps required to make shopping around the default option at retirement. The group will report back to the Treasury later this year.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Does that mean that Aviva will force all it’s own pensioners to go for the omo option even if that means they loose business to the likes of Just Retirement or Partnership?

  2. I see Aviva is preparing to ramp up the pressure on government to make shopping around for an annuity the default option for savers.Why don’t all pension providers just put all the relevant information on their annual statements.What I mean by this is for them to show what sort of an annuity can be bought with them and also their major competitors.At the same time the pension provider should also show without being forced to if there will be any valuable guarantees lost if transferred to a rival.I am aware that annuity rates change regularly therefore if someone requires up to date information they should just contact their pension provider and all relevant information including competitors rates and any valuable guarantees lost should also be available on request.

  3. It is unlikely that Mr Hoban could tell an OMO from a Big Mac judging by his RDR efforts. Good luck.

  4. On looking at AVIVA’s curent at retirement material I do not see an encouragement for their customer to use the omo. I do not see a part of the AVIVA at retirement package which helps the customer take the OMO either.
    Recent experience of AVIVA’s dealings with clients at retirement reinforce this IFA’s view that they are not happy giving up funds at retirement to omo’s and tht they do not assist the IFA’s efforts to deal with his clients independently of their current provider.
    This would suggest a certain disingenousness on Mr Barral’s part. Mark Hoban as one of your comentators says will be unlikley to know one side of the fence in this debate from the other though and it is a great pity that IFAs do not have a reprsentative body whose spopkesman would be able to explain to him just where AVIVA sits with regard to clients receiving independent advice

  5. I wonder how much this has got to do with Aviva’s annuity rates being up at the top among mainstream providers?

  6. Let us all also be a little more fastidious with terms.

    We have the OMO and the IVPP and woe betide anyone who submits the wrong form. A jolly good excuse for reluctant providers to delay and prevaricate.

    Why have separate forms in the first place? Why make the forms so arcane? Why not just have a common vesting form throughout – or am I being too simple? Perhaps this is all just the usual lip service. As far as AVIVA is concerned I don’t think I’d trust them if they told me that this month is August.

  7. Harry
    If you have ideas on improving the forms I’d love to hear from you. Aviva is absolutely supportive of customers shopping around and seeking advice. The sad fact is that many advisers are no longer around when their clients reach retirement. You can email me, david.barral@aviva.co.uk. ps It’s August!

  8. What a load of noise.

    The recent OFT review prevents providers from sharing rates for the purpose of setting price. Aviva appear to be proposing a back door whereby providers are not only allowed to but compelled to share rates…”for the customer good.” As they say in Scotland – “Aye – right.”

    Retirement packs are already stuffed to bursting with compulsory information, much of it legalese. Anyone without an adviser is not going to read half of the info in it. Anyone WITH an adviser has someone to do their shopping around. So…who is this helping?

    And god forbid anyone issues a pack with more than 1 product option in it.

    Nice bit of publicity for Aviva though, along similar lines to their recent banned advert. “What, we’re NOT 20% better than the average annuity provider? Gasp! Terribly sorry…” Well done, David.

  9. How come David Barral gets a meeting with Mark Hoban and I can’t even get a straight answer, to a letter, from him.
    Oh yes, I just realised, I am only unimportant IFA so there is nothing for Mr Hoban to gain from a meeting with me.

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