Just Retirement is calling for networks to ditch planned single-tie annuity distribution deals with providers due to concerns that clients will not get the best deal.
Director Steve Lowe says an increasing number of networks are in discussions with providers over possible single-tie arrangements as they look to boost their revenue ahead of the RDR.
Last month, Money Marketing revealed providers are paying significant amounts of money to distributors as part of long-term distribution deals ahead of the RDR.
These include a proposed £2m, five-year payment for a singletie pension deal between Aegon and Caerus for “sales and marketing activity to support our partnership”. Aegon says the final deal was agreed on different commercial terms.
Lowe says: “We want networks to have a sustainable model. That is in the interests of providers and the members of networks. We need to ensure advisers’ propositions are strong and deliver good value for customers. Single-tie deals will not deliver that.”
Lowe says single-tie agreements run counter to Government efforts to increase the number of people who shop around for a retirement income and will leave advisers at a “huge disadvantage” after the RDR.
He says: “From the adviser’s perspective, being tied to selling products that are not competitive is a huge disadvantage, potentially choking off the oxygen of new business that both advisers and networks rely on to survive. It is important that advisers are clear about whether their clients could end up with poor value deals and understand the risk that could bring to their practice, given increasing competition from comparison services.”
Retirement Solutions director David Bell says: “Single-tie arrangements are a backward step for the industry and do not benefit the client.”