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Friends set for impaired deal

Friends Provident is set to unveil a tie-up with an impaired annuity provider.

Money Marketing understands Friends is in talks with Partnership Assurance over a referral deal, although neither firm would confirm whether or not this was the case.

In an interview with Money Marketing, Friends chief executive Trevor Matthews says following Resolution’s takeover of the firm, another insurer with an annuity book would be a “natural synergy” but that, regardless of this, Friends needs to find a way to offer its customers alternative options for their annuity.

He says: “We need to offer facilities to our maturing and retiring clients. We need to make it easy for them to get access to impaired annuities. We have a deal on the table at the present time. It is pretty obvious that we would be talking to one of those specialised players.”

But Matthews is yet to be convinced of the virtues of third- way annuities because of the difficulty in pricing them at a level which is safe for the provider but also offers a good deal to the client, nor is he sold on the advantages of postcode pricing.

He says: “We are not going to rush into that, there are pros and cons. I might live in a certain place and the overall statistics might show certain results but I might be different. I do not think it is as obvious as whether someone smokes or not.”

Rockingham Retirement managing director Steve Hunt says: “There will be a significant number of people who would have automatically taken the default standard annuity who should now take the enhanced option but, on the downside, it is not whole of market. A lot of people are going to be better off if this deal takes place but they might not be as well off as they could be.”

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