Can you get an annuity without advice?

LXdaddy

Prompted by this http://forums.moneysavingexpert.com/showpost.php?p=67669777&postcount=2 post...
Is it possible to get the best quote on MoneyAdviceService turned into an actual quote and executed without the advice from an IFA?


I followed the link to the website for the best (ie highest) quote they found for me for a particular set of circumstances (joint annuity, 50% to spouse, level payments, 10 year guarantee) and looking at that company's website I find the FAQ explaining that I can only buy from them through an adviser or broker.

dunroving

This should be interesting ...

dunstonh

Is it possible to get the best quote on MoneyAdviceService turned into an actual quote and executed without the advice from an IFA?

Yes. There are internet sites that allow you to DIY. However, you do need to be aware that the annuity rate could actually be worse than an IFA. Smaller pots would likely be better DIY (sub 30k) but larger pots should see an IFA come in better.

Also, the money advice service list is not reliable enough to use. Its a very good guide for basic annuities but not for those enhanced by medical or lifestyle pricing. Plus, it does not include any improved rates for economies of scale.

The moneyadvice service site is not a retailer. It is information only.

This is covered in that same thread you linked to.

bmm78

It is possible to buy annuities without advice. There is no regulatory requirement to have received advice before purchasing an annuity.

Some firms require you to go through an intermediary (either an adviser or non-advised broker).

While it is possible to "DIY" annuities, it is often a false economy and counter-productive for a number of reasons:

• Commission is generated on a non-advised sale regardless of whether you go through a broker or direct
• The Money Advice Service tables are notoriously inaccurate and are not "Best Buys"
• The Money Advice Service quotes are based on limited medical/lifestyle info
• Intermediaries are more experienced in completing medical questionnaires and more likely to complete these correctly and thoroughly
• While it is possible to contact the provider to "haggle" on the rate, it is likely to be more effective if done by a IFA/Broker
• An intermediary is more experienced at managing the transfer of funds between providers, reducing the risk of missing deadlines on rates

So yes, it may be possible to go direct, but the conventional incentive in doing this (saving money) doesn't really apply, and it opens up significant risks elsewhere that could reduce the eventual income you receive.


Going slightly sideways, but the Money Advice Service website is bad at explaining exactly what people should do in order to get an annuity. It gives you some figures (which are more often than not inaccurate), and then some links to providers' websites, which moves you no closer to actually getting one.

dunroving

bmm78 wrote: »

It is possible to buy annuities without advice. There is no regulatory requirement to have received advice before purchasing an annuity.

Some firms require you to go through an intermediary (either an adviser or non-advised broker).

While it is possible to "DIY" annuities, it is often a false economy and counter-productive for a number of reasons:

• Commission is generated on a non-advised sale regardless of whether you go through a broker or direct
• The Money Advice Service tables are notoriously inaccurate and are not "Best Buys"
• The Money Advice Service quotes are based on limited medical/lifestyle info
• Intermediaries are more experienced in completing medical questionnaires and more likely to complete these correctly and thoroughly
• While it is possible to contact the provider to "haggle" on the rate, it is likely to be more effective if done by a IFA/Broker
• An intermediary is more experienced at managing the transfer of funds between providers, reducing the risk of missing deadlines on rates

So yes, it may be possible to go direct, but the conventional incentive in doing this (saving money) doesn't really apply, and it opens up significant risks elsewhere that could reduce the eventual income you receive.


Going slightly sideways, but the Money Advice Service website is bad at explaining exactly what people should do in order to get an annuity. It gives you some figures (which are more often than not inaccurate), and then some links to providers' websites, which moves you no closer to actually getting one.

- I wonder, do you think the government will provide clear guidance on these things as part of the roll-out of the new pension regulations? I mean considering many people are not very clued-up on how these things work, and the fact that there is going to be more choice in what you can do, it would be helpful if there were clear "dummy's guide" explanations of how to go about this, how to choose a trustworthy FA, pros and cons, etc. There is lots of stuff increasingly in the popular press but a government-sponsored set of procedural advice would be useful.


ETA: I know there will be guidance on pensions in general, but wonder if it will include the sort of information described above.

dunstonh

dunroving wrote: »

- I wonder, do you think the government will provide clear guidance on these things as part of the roll-out of the new pension regulations? I mean considering many people are not very clued-up on how these things work, and the fact that there is going to be more choice in what you can do, it would be helpful if there were clear "dummy's guide" explanations of how to go about this, how to choose a trustworthy FA, pros and cons, etc. There is lots of stuff increasingly in the popular press but a government-sponsored set of procedural advice would be useful.


ETA: I know there will be guidance on pensions in general, but wonder if it will include the sort of information described above.

It will not provide silly information like finding a trustworthy FA.

atush

Yes, you can buy an annuity w/o an IFA.

But it would be a pretty stupid thing to do. As an IFA should be able to get you a better quote. Many times enough better to pay for the cost of the advice.

And no, I dont expect the govt to do anything that would provide you free advice or guidance about getting the best price. They will most likely tell you to shop the open market. But there are many providers who dont sell to the public.

zagfles

As discussed before, there are execution only brokers who will refund part/most of the "commission".

A few previous threads on annuities:

http://forums.moneysavingexpert.com/....php?t=4896690
http://forums.moneysavingexpert.com/....php?t=4846538
http://forums.moneysavingexpert.com/....php?t=4266723