Annuity commission

GhIFA

zagfles wrote: »

No, I have a problem with the constant patronising attitude on this board that people are far too stupid to understand financial products, and when someone comes on to ask a question about a specific product, making it clear they don't want financial advice, they get told they need to see an IFA to make sure the product they said they said they wanted is actually the product they need.

The OP asked if the rate of commission was high, and also said he would appreciate any input.

The general consensus was that it was high, and with annuity purchase he's likely to get a better rate if he goes to an IFA.

I'm a bit confused as to where the "constant patronising attitude" is manifesting itself in those responses, which all seem perfectly reasonable in response to the original query raised.

The only one who seems to be getting themselves wound up about it is you.

So, if someone raises a query on here, where they may be better served by getting some advice (for whatever reason that may be) it's better to let them potentially make a costly mistake so as not to offend your sensitivities???

Am genuinely confused as to why you're getting your knickers in a twist over this!

zagfles

bmm78 wrote: »

From a perspective where I see thousands of annuity purchases every year, the vast majority of people are not aware of all of these factors, at least not to the extent that they have a working knowledge of all types of products on the market and are able to link the two together.

So you see lots of people who have decided to buy non-advised annuities? In what capacity do you see their purchases? Obviously if people come to you for advice, they aren't necessarily going to understand these things, which is why they want advice!

For example, it's one thing to be aware of inflation, and another to have an understanding of how dramatic an effect it will have on the annuity's purchasing power and how best to combat it.

A simple spreadsheet will show the effects of inflation, it's not rocket science.

Mis-buying is a far bigger issue in the annuity market than mis selling. Even when people are shopping around, they are often making poor choices about the type of product they go for through a lack of clear guidance.

In the 90's I took out two mortgages, several "advisors" tried to convince me that buying an endowment was a good idea. Luckily I wasn't stupid enough to believe them. I researched the product and decided they were a total rip-off, and totally inflexible. I ignored their "advice" and got repayment/IO mortgages.

Although there are plenty of people more than capable of making sound decisions for themselves, there are many others who think simply getting the highest rate means getting the best deal. There is much more to it than that.

I have no idea of the OP's knowledge in the area. However, if me coming across as a patronising tool helps someone to make a more informed decision on something that is going to affect them for the rest of their life, I think that's a decent trade-off

Shopping around is a great idea. However, shopping around should involve looking at all the options available, which as I've stated non-advised companies can't do. Insurance companies do not permit some products to be sold on a non-advised basis,

Such as?

which means that people are unlikely to be aware of them unless they speak to an adviser. That isn't to say that people wouldn't understand them, but in a lot of cases they are unable to get access to the information in the first place. If you are just looking at the rate, you are instantly dismissing several other options that may actually produce a better overall income, better death benefits or better suit your needs.

A big problem with mis-buying from non-advised desks, as opposed to mis-selling by advisers, is that the customer has very little they can do if they want to complain down the line. Non-advised desks have their place, but anyone using them needs to go in with their eyes open and aware of their limitations.

Well clearly. The same applies to any product or service. I can't sue my car dealer because I bought a Focus whereas a Mondeo suited my motoring needs better. I know far less about cars than I do about financial products, so perhaps I need an Independant Car Advisor next time I buy a car

zagfles

GhIFA wrote: »

The OP asked if the rate of commission was high, and also said he would appreciate any input.

The general consensus was that it was high, and with annuity purchase he's likely to get a better rate if he goes to an IFA.

I'm a bit confused as to where the "constant patronising attitude" is manifesting itself in those responses, which all seem perfectly reasonable in response to the original query raised.

The only one who seems to be getting themselves wound up about it is you.

So, if someone raises a query on here, where they may be better served by getting some advice (for whatever reason that may be) it's better to let them potentially make a costly mistake so as not to offend your sensitivities???

Am genuinely confused as to why you're getting your knickers in a twist over this!

The OP was after input on commission rates on non advised annuities. Yet most responses seem to be telling him to get advice, or implying the advice fee is already included so he may as well take it (ignoring options like annuity discount brokers etc).

We've seen so many examples here of IFAs charging extortionate fees, and being referred to here as "greedy" even by other IFAs, so the worst thing anyone could do is just go to a single IFA and let them deal with it all, without shopping around either independantly or using IFAs.

jem16

zagfles wrote: »

I know far less about cars than I do about financial products, so perhaps I need an Independant Car Advisor next time I buy a car?

With cars, like most products, if you realise that you have made the wrong decision you can simply sell it and buy another.

With retirement provision you are making one of the biggest decisions of your life. Unfortunately with an annuity you don't get the chance to sell it and buy another. You're stuck with it for the rest of your life. So it's important to get this decision right.

Many people assume that an annuity is the correct choice and that cutting out the middle man is the way to go as it must be cheaper. We don't know what the OP is thinking as s/he hasn't been back for 3 weeks to check on replies.

However I am also puzzled as to where the OP has said he doesn't want advice. He said;

ineedalabotomy wrote: »

Hi, Wondered if anyone would know if 4% commission for a direct non advised Annuity quote/purchase is the going rate ? and would this be negotiable ?........ Would appreciate any input.

jem16

zagfles wrote: »

The OP was after input on commission rates on non advised annuities. Yet most responses seem to be telling him to get advice, or implying the advice fee is already included so he may as well take it (ignoring options like annuity discount brokers etc).

We've seen so many examples here of IFAs charging extortionate fees, and being referred to here as "greedy" even by other IFAs, so the worst thing anyone could do is just go to a single IFA and let them deal with it all, without shopping around either independantly or using IFAs.

I don't think anyone here has told the OP to simply see one IFA and not shop around. People have rightly told him that he would fare much better seeing an IFA as the annuity rate will be better.

Annuity discount brokers will also take a fee which will be built into the rate.

zagfles

jem16 wrote: »

With cars, like most products, if you realise that you have made the wrong decision you can simply sell it and buy another.

And lose a lot of money (if the car was new).

With retirement provision you are making one of the biggest decisions of your life. Unfortunately with an annuity you don't get the chance to sell it and buy another. You're stuck with it for the rest of your life. So it's important to get this decision right.

Like, say, having children? A far bigger life-changing decision, both financially and non-financially, so perhaps nobody should take that decision without getting paid professional advice?

Many people assume that an annuity is the correct choice and that cutting out the middle man is the way to go as it must be cheaper. We don't know what the OP is thinking as s/he hasn't been back for 3 weeks to check on replies.

However I am also puzzled as to where the OP has said he doesn't want advice. He said;

What does "non advised" mean to you?

GhIFA

zagfles wrote: »

The OP was after input on commission rates on non advised annuities. Yet most responses seem to be telling him to get advice, or implying the advice fee is already included so he may as well take it (ignoring options like annuity discount brokers etc).

We've seen so many examples here of IFAs charging extortionate fees, and being referred to here as "greedy" even by other IFAs, so the worst thing anyone could do is just go to a single IFA and let them deal with it all, without shopping around either independantly or using IFAs.

Thanks for putting "non-advised" in bold, but I can read - still, at least doing that isn't showing that "patronising" approach you were complaining about earlier.

The OP asked for "any" input - the input he has been given is that the non-advised rate is high, he could potentially get a better rate for a lower fee from an IFA - shopping around is the very thing he's being told to do.

Perhaps in future, before a response is given to any threads on this board we could wait for you to summarise what is being asked, and what responses you would like to see so that we don't upset you??

zagfles

jem16 wrote: »

I don't think anyone here has told the OP to simply see one IFA and not shop around. People have rightly told him that he would fare much better seeing an IFA as the annuity rate will be better.

It would be interesting to put to the test. Would also be interesting to see how IFAs would react to a customer who makes it clear he's shopping around via other IFAs and independantly, and he'll go with the one who gets him the best rate net of charges. Wonder how many would be willing to deal with him on a no-fee basis if they don't get the best deal?

Annuity discount brokers will also take a fee which will be built into the rate.

Really? I thought they were charities?

jem16

zagfles wrote: »

And lose a lot of money (if the car was new).

Yes but it can still be done.

Like, say, having children? A far bigger life-changing decision, both financially and non-financially, so perhaps nobody should take that decision without getting paid professional advice?

Perhaps they should.

What does "non advised" mean to you?

It means that is one route he has considered.

What does "would appreciate any input" mean to you?

jem16

zagfles wrote: »

Really? I thought they were charities?

And you're complaining of patronising attitude ..........