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FOS criticises annuity advice

The Financial Ombudsman Service has set out its concerns about the quality of advice surrounding alternatives to traditional annuities.

In this month’s Ombudsman News, the FOS published a number of case studies explaining where it has found against the adviser from a steady stream of complaints it is receiving.

In the upheld complaints, the FOS criticises advisers for not explaining the benefits of traditional annuities, not making clear the risks of alternatives such as flexible annuities and pension drawdown for those on a limited income or giving unsuitable advice when transferring funds out of employer schemes.

The FOS says it gets a few hundred complaints a year around advice on alternatives to traditional annuities.

This month’s Ombudsman News also warned firms making technical errors that result in clients missing Isa deadlines that they should in some cases pay compensation, even if there is no quantifiable loss.

It says it is often difficult to assess any loss or that any financial detriment to the consumer is small but that sometimes it considers it appropriate to pay the customer a modest amount in recognition of the inconvenience caused.

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