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Transact rejects third way as better for provider than client

Transact has ruled out providing a variable annuity option on its platform as it believes that providers rather than consumers will be the product’s biggest beneficiaries.

Sales and marketing director Malcolm Murray says: “We fail to see the attraction of this type of product even in a relatively low interest rate environment unless there is a pass-on facility to the non-dependent beneficiaries in the event of a surplus arising from the annuity.

“It seems as if the annuitant is taking an unnecess- ary risk, with the main beneficiary likely to be the annuity provider.

“If the annuitant is expecting to live a long time, then a guaranteed income is preferable and if they are not expecting to outlive the average, then they would not want a variable annuity that starts lower.”

HM Consulting chief executive Holly Mackay says: “The variable annuity market in the UK is going to develop a lot and it will need some kind of fund supermarket engine to fuel this.

“This is an opportunity for platforms. Variable annuities could start to become a competitive advantage point between them.”

Cofunds communications consultant Richard Eats says: “It is something that we are looking at but it is still an evolving market and we may just see how it unfolds over the next few months and how IFA demand shapes up.”


Rock to make 1,300 redundant

Northern Rock has confirmed it is to make 1,300 staff redundant by the end of today.

Sole trader banned for transfer failings

The FSA has banned sole tra- der Darrell Mark Eaden from being a senior manager after he failed to effectively monitor his pension transfer specialist, exposing customers to the risk of receiving unsuitable advice.

Listing pressure sees IFAs seek providers’ cash

Friends Provident managing director of UK sales and marketing Simon Clamp says the burden of being stockmarket-listed has been one of the drivers behind IFA firms seeking investment from providers.


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