No Advice Annuity Investigation

No Advice Annuity Investigation.

The financial services industry regulator the Financial Conduct Authority (FCA) has confirmed that it is to investigate annuities that were sold to consumers without advice.

This practice involved a range of pension companies when approached by a pension policyholder for retirement details they automatically enclosed illustrations for a preselected "tied" annuity with a specific pension company. In short Pension Company A had an arrangement with Pension/Annuity Company B. To the consumer this looked as if this was the only retirement option and only in the small print was it highlighted that many pension savers have the option to search the whole market for the best annuity company.

The FCA suggests that there could be over 600,000 annuity policies that was sold this way since 2008 and the regulator is going to investigate with broad samples as to whether these were unsuitable for the pension saver.

Comment

We have seen many examples of this with brand-name pension companies offering an annuity with another brand-name pension company and when you read the small print huge amounts of commission were being paid between the two companies without any advice given. In fact when we came across these types of cases both pension companies made it extremely difficult for us to get information in order for us to compare and when we suggested to the pension company A that we were in fact giving advice are, they still suggested they would pay any commissions to pension company B.

We are delighted that the FCA is investigating this matter and we trust they will award compensation for the blatant way that we believe some pension companies acted in not offering or making it clear enough to their clients that a better deal may be sought elsewhere.