View more on these topics

The A Team

Money Marketing revealed this week that Aviva is set to channel customers with pension pots worth less than £30,000 to an annuity referral service, which will search for the best deal from a panel of rival providers.

The news, which we first tipped in May, will see customers guided through their annuity options and offered rates from a panel including Aviva, Aegon, Prudential, Canada Life, Legal & General and Partnership Assurance.

Aviva takes a cut of the commission the referral service, The Annuity Team, receives from the chosen provider but the percentage has not been disclosed.

The firm has piloted the model with retail customers and a quarter of all customers referred to date have received an enhanced rate.

Aviva is now extending the service to its maturing pension customers. It insists it checks they do not have an existing financial adviser first.

The Annuity Team has also signed referral deals with Paradigm and is looking for new partners.

What are your thoughts? Surely people with smaller pots, who are often ignored by the industry because they are not as profitable as wealthier customers, will benefit from this arrangement?

Should adviser firms that feel small pots are not worth the hassle follow the example of Paradigm and refer cases on to such a service?

Aviva says it will carefully check customers have been genuinely orphaned by their IFA before referring them to The Annuity Service but it has slipped up here in the past. Could this pose a problem?


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. David Trenner - Intelligent Pensions 3rd December 2009 at 4:47 pm

    As long as triviality remains at 1% of the LTA (and don’t forget that the LTA has been frozen for 5 years, so the trivial limit will reduce in real terms), there will be policyholders with funds which are not big enough to justify them taking advice – nor to allow advisers to handle them economically.

    I recently referred someone with £15,000 AVCs to Rockingham and Hargeaves (they spoke to both and went with the former) as I feel that these firms are set up to handle small enquiries better than we are. I think that this is the way that the market will go, and providing that people with small funds get the best possible rate this has to be best for them.

    What we don’t want to see is the ‘not so open market option’, with people being passed to firms that are better than the worst, but worse than the best.

  2. The trivial limit should be increased to 3% of LTA and then trivial admin work will not need to be undertaken. Until then the FSA should require all pensioncompanies who by law have to offer an annuity to include the FSA tables for their stateed own options on the day the figures are run so that a client can see straight away, they may be better opting for an OMO. It would then be down to the FSA tables to point out that taking the highest paying may still not be best and getting Independant advice to macth their individual circumstances (including health, former occupation and postcode) does mae sense to pay a modest sum for.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm