Non-advised annuity broker Key Retirement Solutions has changed the way it describes its charges following accusations it was “misleading” customers.
Last week, Money Marketing reported adviser concern about KRS’ claim that its service is “completely free of charge”.
In a section on the firm’s website setting out frequently asked questions, KRS asked: “How much will [the KRS] annuity service cost me?”
In answer to this, KRS said: “Absolutely nothing! Our service is completely free of charge to you because we receive payment from your chosen annuity provider.
“We could potentially increase the worth of your pension pot by over 80 per cent and it won’t have cost you a penny!”
Most annuity broking services, including KRS, make their money from commission paid by the provider, rather than charging the end client a fee. This commission is taken from the client’s fund.
Worldwide Financial Planning IFA Nick McBreen said the description KRS used was “extremely misleading and confusing”.
KRS chief executive Dean Mirfin says the firm has now changed the way it describes charges in its literature.
The FAQ section on pricing now says: “We don’t charge you a fee as we receive payment from your chosen provider, this is taken into account by your provider in the rate you receive.”
Chase de Vere head of communications Patrick Connolly says: “The original description KRS used was incredibly misleading and it is right they have changed it.
“But there is still a huge transparency gap between discount brokers and advisers and I think the FCA will have to force brokers to come clean about their charges.”