Over 1,000 advisers and annuity brokers have registered to be listed on a new directory designed to help savers shop around at retirement.
The ‘Pick-A’ directory, which launches today, provides a “shop window” for regulated retirement specialists to promote their services to savers across the UK.
People who use the service are asked to input their age, fund value and postcode. They are then given an estimate of their potential retirement income and told they could get more if they have medical problems.
At this point the user is able to choose from three options – a complete financial planning service, help focused purely on their pension or a list of annuity rates.
The directory then generates a list of advisers and brokers who can provide these services and states the fee they charge or commission they receive in pounds and pence.
The customer is told whether the intermediary is restricted or independent and whether they will shop around the whole of the market or from a panel of providers. In order to be listed on the directory intermediaries must be able to provide annuity rates from at least 75 per cent of the market.
Pica chairman and Hargreaves Lansdown head of pensions research Tom McPhail says: “The goal is for the Pick-A directory to quickly become the default referral service for all those seeking professional help to shop around for the right retirement income.
“We have created a market solution to serve the interests of consumers and the industry. It will be a unique mechanism for improving industry standards over time.”
Evolve Financial Planning director James Norton says: “At the moment a paltry number of people shop around for an annuity. If this directory is easy to use and independent then it has to be a good thing.”
However, some critics have raised concerns the directory favours non-advised firms ahead of independent advisers.
Consultant Ros Altmann says the wording of the directory is “biased” in favour of non-advised firms and may lead consumers to believe the DIY route is better. She also says there is not enough differentiation between independent and tied advice and attacks the suggestion that covering 75 per cent of the market is equivalent to being whole of market.
She says: “Sadly, this Directory is more likely to mislead people into buying without advice, from non-advised services which claim that their ‘guidance’ is at least as good for the customer as ‘advice’. Taking independent advice is almost always likely to be better than trying to make this complex decision on one’s own.”
Advisers can sign up to the directory at www.Pick-A.org.