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Fortunately, e-commerce does exist in the area of annuities now, with virtually all the leading annuity providers now offering live annuity quotes via XML technology, either via their own website or that of a third party.

This means that with the correct system in place, an adviser can enter the annuity basis required and within 30 seconds have guaranteed annuity quotations and the associated documentation from the leading annuity providers.

The details are then available to print or email as required, making an annuity purchase simpler for advisers and gives the opportunity for clients to buy their annuity via your website, with no need for adviser input.

To date, the annuity providers have only made this technology available to a handful of the specialist annuity brokers due to the initial set-up costs and complexity of the links. Origen, being one of these, now has active links in place with Canada Life, Prudential, Legal & General, Friends Provident, GE Life and Clerical Medical.

Traditionally, to obtain annuity quotes and ensure they are accurate and correct could mean four or five faxes and a couple of phone calls. This is now a thing of the past, releasing advisers to spend more time advising rather than paper-pushing.

In addition to being able to provide and guarantee that you are recommending the top rate every time is critical and this can now be achieved almost instantly at virtually no cost to the adviser or the annuity provider. No more incorrect quotes and hours wasted on the phone trying to explain complex benefit structures to call centres. Annuity heaven.

Does this mean that small funds can be transacted? Well, the costs associated with annuity purchase can easily outweigh the commission generated so advising on small pension funds becomes impossible. However, by giving the client the tools to make sensible decisions and access the top annuity rates, many that could not access the open market option without paying a substantial fee can now do so at no cost to themselves, the adviser or the annuity provider. Such systems will normally provide quotations for any fund of more than 5,000.

With the advice element removed, the transaction can be profitable, leaving only the administration to be completed by the adviser. Any assistance required in the process can be provided by helpline facilities, providing factual information and help completing the associated documentation.

Many pension schemes are linking to white-labelled versions of these systems. This gives them a lowcost solution to providing information to members prior to retirement, with extranets giving all staff access. A useful and relevant tool, even if the assess is restricted to viewing quotations only, rather than offering the ability to purchase.

What happens if clients or members need advice or might qualify for impaired annuity rates? While the systems have been designed to assist and educate clients and scheme members, many will simply find the decision too difficult to make or the forms too complex to complete. We must remember that not everyone is comfortable with either pension or the internet, let alone both. For these, a phone- and post-based advisory system gives them the advice they need, with no need to use the internet.

For those that may qualify for enhanced or impaired life annuities, XML quotes is not currently the way to proceed. For those that have reduced life expectancy, it is always worth getting quotes from all the impaired life annuity providers, many of which either do not have XML technology or have manual underwriting processes. Again, such individuals should be encouraged to seek advice, even if it does incur the payment of a fee, a fee normally well worth paying for the potential of receiving enhanced rates for the rest of their life.

What is needed is for all providers to link up to XML technology, as without the links, they will be left behind. Second, we need to look beyond the quotation stage and look at the long-winded administration process. Simple things such as a common discharge form would save a considerable amount of time and money for both IFAs and providers. After A-Day, this can be a real possibility but the leading providers need to do this first before we can attempt to pressurise the closed life offices into action.

Finally, the transfer of pension funds to the selected annuity provider can take months, when the transaction should be completed within a week. This is not acceptable to the client or the adviser, yet the problem still persists. Unfortunately, this problem is not limited to closed life offices, with many top providers also creating unacceptable delays.

A lot has already been achieved between the leading annuity specialists and the annuity providers but more needs to be done to bring everyone up to the same point. The annuity market has massive growth potential but will fail to achieve real success unless technology and systems are developed to support this market.


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