IFAs ignorant about annuities

EdInvestor

This report in FT advisor (another IFA trade press mag) clarifies that it's one in 5 IFAs who know about income drawdown, not i in 8 (which applies to in vested annuities).

http://www.ftadviser.com/FTAdviser/Pensions/Personal/RetirementPlanning/Annuities/News/article/20090721/cf40dea8-7545-11de-8d39-0015171400aa/Lack-of-annuity-knowledge-amongst-IFAs-ACH.jsp

The ACH does appear to have some credibility in the industry as can be seen by its business partners.

whiteflag_3

EdInvestor wrote: »

The ACH does appear to have some credibility in the industry as can be seen by its business partners.

What? Are you seriously saying getting into bed with insurance companies gives you credibility. They(insurance companies) couldnt care less where the business comes from especially if it comes for free.

ps did you have a read of the Rockingham website?
pps your ft link is from the same press release

im going to email Steve Hunt tomorrow to ask him for the full survey and who conducted it.

MikeJones_2

It's an interesting post and I hope I don't regret this comment (so treat me gently please as I'm trying to widen the debate).

I'd throw this comment/analogy in as a neutral observer:

(a) If you owned and drive a Rolls Royce (for the sake of this example), would you go to your local (non specialist) garage to have it serviced?

(b) If you drive a 'normal' car, would you go to a local Rolls Royce dealer to have your car serviced?

Relevant or wide of the mark? Don't shoot the messenger. Join the debate!

Mike

Apologies to Rolls Royce, mechanics, specialist and non specialist IFAs everywhere.

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

MiloH

EdInvestor wrote: »

This report in FT advisor (another IFA trade press mag) clarifies that it's one in 5 IFAs who know about income drawdown, not i in 8 (which applies to in vested annuities).

http://www.ftadviser.com/FTAdviser/Pensions/Personal/RetirementPlanning/Annuities/News/article/20090721/cf40dea8-7545-11de-8d39-0015171400aa/Lack-of-annuity-knowledge-amongst-IFAs-ACH.jsp

The ACH does appear to have some credibility in the industry as can be seen by its business partners.

I don't know enough about Rockingham to comment. But I do know that having worked as an account manager for two large pension companies, if I was the account manager for Pru, L&G or MGM I would be working extremely hard to secure annuity business from them. My understanding from their website is this is a Rockingham business idea where business is processed through just these three companies and seems to be a good source of new business for the life offices rather than a joint venture.

Their idea looks interesting and possibly a good solution for savers with small pension funds who can get a better annuity rate than their existing pension company without having to pay a fee. I wouldn't want to be seen to be knocking them as a business but I think their strategy for trying to allure IFAs to do business with them is extremely odd. There's certainly three IFAs on this thread who don't feel warmly disposed to them. If they are reading this, I hope that they will publish their survey questions and the results and explain how the survey was carried out so that we can all draw our own conclusions from it.

DiggerUK

EdInvestor,
Couldn't log off without a word of support.

What it seems we have here, is the usual suspects taking great exception to anybody shining a light on a discredited industry.

The firms mentioned will have great insider knowledge of the sharp practice, and ignorance, that is rife in the IFA world.
In touting for business they use the public fear of this knowledge to get the business in.

What it all boils down to is a business war between different thieves.

The casualties are those who fall for the old mantra of "You need to see an IFA"
when nobody giving, or receiving the advice, have a clue who they are dealing with.

EdInvestor

http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=187119&d=pnd2&h=pndh2&f=pndf2

Further publicity for the ACH idea in yet another IFA trade mag.

Managing director Steve Hunt says if the system is effective, ACH will consider a direct to consumer version. Hunt says: "Official data shows fewer people are utilising the open market option when looking for the best annuity deal. This is primarily because most people believe there is too much complex trawling of the market involved.

Could this be why the IFAs are so critical of this company? We all know how much they hate the competition they get from other direct-to- consumer companies like Hargreaves Lansdown.


I'd like to encourage ACH to set up a direct to consumer annuity operation so people can do their own shopping around for annuities.If they'd like to rebate some of the commission as well, that would be an added bonus

MiloH

MikeJones wrote: »

It's an interesting post and I hope I don't regret this comment (so treat me gently please as I'm trying to widen the debate).

I'd throw this comment/analogy in as a neutral observer:

(a) If you owned and drive a Rolls Royce (for the sake of this example), would you go to your local (non specialist) garage to have it serviced?

(b) If you drive a 'normal' car, would you go to a local Rolls Royce dealer to have your car serviced?

Relevant or wide of the mark? Don't shoot the messenger. Join the debate!

Mike

Apologies to Rolls Royce, mechanics, specialist and non specialist IFAs everywhere.

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

I agree with your analogy Mike. I think where I have a problem with the survey is that it states than even Rolls Royce mechanics don't know their crankshaft from a shock absorber. It effectively implies to the reader that wherever you go for a service, chances are you'll be dealt with by someone who doesn't know what they are doing. It doesn't remotely reflect my experience of the industry and while it might encourage some readers to go to Rockingham because they must be experts, it will also leave others lifting the bonnet themselves, having a fiddle and making irrevocable damage to the engine.

However, it does serve as a reminder that before appointing an IFA, people have to do their homework, ask questions, and understand the IFA's qualifications and ability to advise in the area you want help in.

MiloH

EdInvestor wrote: »

Could this be why the IFAs are so critical of this company? We all know how much they hate the competition they get from other direct-to- consumer companies like Hargreaves Lansdown.

Hmm, the IFA industry has been used to direct-to-consumer firms for over 20 years now. If you want advice, see an adviser; if you want to buy something without advice, go direct and don't pay for advice.

EdInvestor wrote: »

I'd like to encourage ACH to set up a direct to consumer annuity operation so people can do their own shopping around for annuities.If they'd like to rebate some of the commission as well, that would be an added bonus

Hargreaves Lansdown already do this of course although I don't know whether they give up commission.

DiggerUK

MiloH wrote: »

However, it does serve as a reminder that before appointing an IFA, people have to do their homework, ask questions, and understand the IFA's qualifications and ability to advise in the area you want help in.

The problem as you well know is that most people who meet someone who tells them they are an IFA, stop there.

Why is there no obligation of an IFA to declare anything to the punter.

Why do you not accept the simple fact that the IFA industry is tainted by sharp practice.

EdInvestor

MiloH wrote: »

Hargreaves Lansdown already do this of course although I don't know whether they give up commission.

They don't AFAIK and they also don't cover enhanced annuities on a DIY basis.