Money Marketing recently revealed that Aegon is creating Aegon UK Direct to sell standard annuities and impaired life annuities from a currently unnamed specialist provider.
Aegon is following Legal & General who have their own “no advice” annuity service, which is also extended to include impaired life annuities.
L&G says: “The Annuity Solutions service is proving to be very popular and it is clear that there is a demand from customers who feel confident enough to buy a pension annuity themselves.”
But Intelligent Pensions technical director, David Trenner says: “Being confident enough to buy an annuity and understanding all of the issues involved are two completely different things.”
He adds: “Many IFAs do not specialise in advising on annuity purchase struggle with the complexities, so what chance do untrained members of the public have?
“Could it be that the likes of L&G and Aegon are looking to increase profits by cutting out the cost of advice?”
An Aegon spokeswoman says: “As an owner of leading IFA firms, and a key player in the annuity market, Aegon recognises how valuable advice is when customers are choosing an annuity.
“With Aegon Direct we are looking at how a service offering a basic level of
advice could provide annuities to affinity group customers, where this need
has been clearly identified by both the customer and the consultant.”
She adds: “This service would link in to services already provided by our IFA firm Origen. Where it is clear full advice is needed, the customer would be referred to Origen.”
“We do continue to recommend customers seek advice for suck an important decision.”
L&G says it is responding to demand from those who do not wish to use an IFA.