View more on these topics

Hargreaves Lansdown wants Omo as default

Hargreaves Lansdown is urging the Government to make the open market option the default option for annuity sales to stop customers ending up in second rate products.

In its response to the Government’s Omo review, introduced alongside the national pension savings scheme reforms, Hargreaves Lansdown calls for zero tolerance on transfer delays with a system of FSA fines for product providers, including those closed to new business.

It says too many customers are ending up in poor annuities with their existing provider through inertia as buying an annuity from the existing insurer is often seen as easier than taking the Omo option.

It says investors should be steered to the Omo as their default option, with their existing insurer having to compete for the annuity business on the open market.

As customers already pay for advice through annuity rates, even if they stick with their existing provider, Hargreaves says the Omo is no more expensive. The response also calls for a system of FSA fines for providers which are slow to release funds.

Hargreaves Lansdown is also calling for a universal application form, a universal discharge form and kite-marking to identify quality Omo intermediaries.

Head of pensions research Tom McPhail says: “We cannot allow pension companies to profiteer from pensions inertia which enables them to sell second-class products to consumers.”

Origen head of annuities Nick Flynn says: “The difficulty is how to treat small pensions pots which providers won’t exactly be queuing up to service. Fines paid to consumers are a very good idea as the ABI guidelines are too woolly. Providers should be able to discharge funds within seven working days but I can count on one hand those firms that actually do that.”


BM Solutions extends capped rates to mainstream and self-cert

BM Solutions has introduced capped rates to its mainstream and self-cert ranges.The launch follows BM’s recent move to introduce capped rates to its Buy to Let range.In the mainstream range is a two year product tracking the Bank of England base rate at minus 0.16 per cent, capped at 6.09 per cent. Self cert products […]

Thoresen calls on industry to engage in generic review

Aegon UK chief executive Otto Thoresen says the industry must engage in the generic advice review or suffer a further hit to its reputation and loss of future business.Speaking at the ABI’s annual conference in London, Thoresen, who was appointed to head the Government’s financial capability review in January, said he was working on the […]

The rebate risk

Margaret Jago, technical manager at Aegon Scottish Equitable International, considers why the Treasury took action over commission rebating on offshore bond business and why some life offices have welcomed the move.

Room for improvement in treating customers fairly

The industry still has a long way to go to embrace the FSA’s treating customers fairly regime, according to a newly launched consultancy.TCF Index says its independent research, conducted by NOP, shows a high proportion of senior management are not assessing TCF policy with only 26 per cent of respondents saying that all senior executives […]

Natixis video: Making smarter use of asset classes

Content supplied by Natixis Global Asset Management This video from Natixis Global Asset Management focuses on Active Share. One strategy for the smarter use of equity investments is ensuring you get what you pay for. According to the company, looking at Active Share can give you a better perspective on where performance comes from. Active […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment