IFAs ignorant about annuities

EdInvestor

This is a worrying survey for anyone coming up to retirement because it is almost impossible to shop around for an annuity on your own, the informqation simply isn't available.

http://www.ifaonline.co.uk/ifaonline/news/1469021/half-advisers-poor-knowledge-annuities

The solution may be to use specialist annuity IFA firms.Bad enough that 50% of IFAs don't have a good grasp of annuities in general and two thirds don't know about impaired life products: appalling that only 1 in 8 IFAs seems to have any understanding of income drawdown.

whiteflag_3

An interesting survey!! conducted by Rockingham Retirement, the same company that spammed this thread

http://forums.moneysavingexpert.com/showthread.html?t=1247921&highlight=rockingham

Given your final comments Ed, should readers rely on the findings of their latest marketing initiative, sorry survey?

Paul_Herring

The_Article wrote:

A survey of 275 IFAs found 50% believe they do not have a thorough knowledge of the retirement income sector.

Emphasis mine.

Isn't the IFA profession broken up into sections, in much the same way that, say, the engineering industry is?

For example, you wouldn't go to a firm that specialises in building bridges to fit out your oil refinery with new pipework, so why go to an IFA that specialises in mortgages for your annuity?

EdInvestor

They seem a respectable firm.

http://www.risk.net/public/showPage.html?page=ifa2006_articleimport&tempPageName=859509

A new service has been launched to make it easier for advisers and their clients to search and apply for an annuity.


The Annuity Clearing House (ACH), a venture by Rockingham Retirement in conjunction with Prudential, Legal & General and MGM, will use technology to significantly speed up the quote an application process for retirement income.

dunstonh

A survey of 275 IFAs found 50% believe they do not have a thorough knowledge of the retirement income sector.

There are about 20,000 active IFAs. 275 respondents is not exactly good enough.

Most IFAs will never say they know everything about a subject and will tick the option that they can indicates the still have something to learn on that subject. Also, many IFAs will not transact in higher risk areas. So, by default their knowledge will not be as strong as one that does.

Bad enough that 50% of IFAs don't have a good grasp of annuities in general and two thirds don't know about impaired life products: appalling that only 1 in 8 IFAs seems to have any understanding of income drawdown.

Sample isnt enough to come to that conclusion. You could have had a high proportion of mortgage IFAs in there who never do retirement options.

If you ever look at these surveys they ask an IFA to fill out its usually multi choice answers with 3-5 options. You typically never click the top one or the bottom one unless you have a damned good reason to as they as usually pretty emphatic in what they are indicating.

whiteflag_3

EdInvestor wrote: »

They seem a respectable firm.

http://www.risk.net/public/showPage.html?page=ifa2006_articleimport&tempPageName=859509

You were the one who posted "avoid" in the previous thread thats all.

Why do they seem like a respectable firm now?

Ive looked at this on their website and I dont think their knowledge of drawdown is too hot either
http://www.rockinghamretirement.co.uk/index.php?option=com_content&task=view&id=53&Itemid=50

MiloH

Interesting thread whiteflag. Reading the ifaonline article I have to say I was immediately suspicious and I would love to read the questions that illicited those answers! I suspect that there was some rather generous interpretation on Rockingham's behalf. I wonder why they haven't put details of the survey questions and answers on their website?

All survey results have to be analysed against the context of the sponsoring company's agenda. Rockingham (ACH) appear to be launching a retirement out-source service for IFAs, and one can imagine that undermining IFA confidence in their ability to provide rounded at-retirement advice could be part of that strategy. The article was delivered to the IFA press rather than the consumer press.

In my experience of IFAs, many years of which were spent as an account manager for pension companies, almost all of those who actively give advice in the at-retirement market have a good understanding of annuities (including smoker and impaired life annuities). Advisers in the income drawdown market have to be able to demonstrate competence to advise through qualification. I simply can't see advisers who have passed an exam saying they don't consider themselves well qualified to advise in the subject.

whiteflag_3

MiloH wrote: »

Interesting thread whiteflag. Reading the ifaonline article I have to say I was immediately suspicious and I would love to read the questions that illicited those answers! I suspect that there was some rather generous interpretation on Rockingham's behalf. I wonder why they haven't put details of the survey questions and answers on their website?

All survey results have to be analysed against the context of the sponsoring company's agenda. Rockingham (ACH) appear to be launching a retirement out-source service for IFAs, and one can imagine that undermining IFA confidence in their ability to provide rounded at-retirement advice could be part of that strategy. The article was delivered to the IFA press rather than the consumer press.

In my experience of IFAs, many years of which were spent as an account manager for pension companies, almost all of those who actively give advice in the at-retirement market have a good understanding of annuities (including smoker and impaired life annuities). Advisers in the income drawdown market have to be able to demonstrate competence to advise through qualification. I simply can't see advisers who have passed an exam saying they don't consider themselves well qualified to advise in the subject.

Agree 100%.

I fail to see why any IFA would need to use the services of ACH, unless of course they were interested in the higher levels of commission.

As you say the survey is meaningless without details of exactly who they spoke to and what questions were asked.

smerch1468

EdInvestor wrote: »

This is a worrying survey for anyone coming up to retirement because it is almost impossible to shop around for an annuity on your own, the informqation simply isn't available.

http://www.ifaonline.co.uk/ifaonline/news/1469021/half-advisers-poor-knowledge-annuities

The solution may be to use specialist annuity IFA firms.Bad enough that 50% of IFAs don't have a good grasp of annuities in general and two thirds don't know about impaired life products: appalling that only 1 in 8 IFAs seems to have any understanding of income drawdown.

Well here's the information for a standard annuity from the FSA, and I would suggest that someone who thinks they need an impaired life annuity may need independant advice anyway.

http://www.fsa.gov.uk/tables/bespoke/Annuities

EdInvestor

There you are, peace and unity once again descends on the IFA world.

whiteflag_3

EdInvestor wrote: »

There you are, peace and unity once again descends on the IFA world.

Three IFAs saying another IFAs survey is a waste of time and basically a gimmick to drum up support for their new service with a limited number of providers and thats how you see it- bizarre

Once again Ed a really disappointing post- its a shame that you started the thread and despite whats been posted which contributed well to the debate, this is the best you can come up with.