May I clarify the issues that I am raising regarding the open market option, particularly in light of Maggie Craig’s recent comments in Money Marketing.
I have to say that the Association of British Insurers regularly misses three points. First, a number of providers offer a variable commission that enables conversion of small pots to be done economically. Even after taking a higher commission (fee) from the fund, we can very often beat the ceding provider.
As some form of customer-agreed remuneration will be the norm after the RDR, the ABI argument is, in my view, negated.
Second, I acknowledge that the Options’ initiative is excellent – but not all providers subscribe to it.
Finally – and the point continually missed by the ABI – is that the Options’ initiative deals only with transfer of funds after the decision to exercise Omo is made.
The standard of information and the timescales to provide information to reach that decision is woeful – there are often mistakes and delays in obtaining forms.
Congratulations to the ABI for Options but its next – and by far the most significant task – is to sort out the delivery of timely and accurate information from ceding providers.
Chief executive officer