Mis Sold Annuity Compensation

Mis Sold Annuity Compensation.

The Financial Conduct Authority has conducted a thematic review of pension annuities that were sold without advice and issued its report today.  The FCA sampled annuity 1200 annuity direct sales between 2008 and 2015 to find out whether consumers were given enough information at the point of sale to make an informed decision.

Specifically, whether consumers were made aware that they could shop around and whether or not they may be eligible for enhanced annuities due to ill health or being a smoker.  The pension companies investigated are larger pension companies that control around 2/3rds of the retirement market.

In dealing with customers, the FCA found that some but not all providers and no-advice sales:

• call handlers used scripts and were unable deal with client questions
• customers were not always aware that they may obtain higher income by shopping around
• customers were not made aware of enhanced annuities or talked down the potential increase in income that they may secure elsewhere

The FCA has also suggested that consumers who feel they may not have been given sufficient information about shopping around or enhanced annuities should contact their pension company.

Comment

Yet again, the regulator acts too late.  For years, the IFA market has been calling on regulators and pension companies to be clear in the annuity documentation they issue to consumers that they should shop around.  One line in your retirement quotation pack suggesting you shop around is, was and never has been enough.