Arranging an annuity

choi

I have had a good quote from Hargreaves and Lansdown
Their fee is paid by the annuity provider

Should I go direct with them
Or ask an IFA to carry out this work

I have had two quotes

Quote 1
1% of Pension Pot plus set up fee of £300.00
Quote 2
0.55% of pension Pot all in

Is it worth the extra cost over HL
Quote 2 would cost approx £1250.00

Linton

Doesn’t it rather depend on who can get the best annuity? Are HL searching the whole of the market? Are you able to get an enhanced annuity?

choi

Linton wrote: »

Doesn’t it rather depend on who can get the best annuity? Are HL searching the whole of the market? Are you able to get an enhanced annuity?

HL have provided the best quote
Not a lot in it to be honest
About £400 more pa

All quoted on enhanced annuity
Joint 50% Spouse
RPI Escalation
100% Value Protection

What could go wrong

HL charge no fee

Marcon

I don't follow. Have you already had quotes via an IFA? If not, how can HL have provided the 'best' quote when you have nothing with which to compare it in terms of whole of market search?

SonOf

Last time we were competing with HL, our fee was a little higher than the commission HL quoted but the annuity rate we obtained was significantly higher.

The annuity companies frequently say that the adviser arranged plans tend to give higher rates because of better quality declarations on health. Plus, IFAs have account managers at the providers who will haggle to improve their rates.

I would say if the pot is over £30k after taking TFC then an IFA should come in better in most cases.

All quoted on enhanced annuity
Joint 50% Spouse
RPI Escalation
100% Value Protection

With that mismatch selection, I would say you need an IFA.

choi

Marcon wrote: »

I don't follow. Have you already had quotes via an IFA? If not, how can HL have provided the 'best' quote when you have nothing with which to compare it in terms of whole of market search?

Both annuity quotes from IFAs were lower than HL quote

choi

SonOf wrote: »

Last time we were competing with HL, our fee was a little higher than the commission HL quoted but the annuity rate we obtained was significantly higher.

The annuity companies frequently say that the adviser arranged plans tend to give higher rates because of better quality declarations on health. Plus, IFAs have account managers at the providers who will haggle to improve their rates.

I would say if the pot is over £30k after taking TFC then an IFA should come in better in most cases.



With that mismatch selection, I would say you need an IFA.

In this instance both IFA gave lower quotes
Plus fees for carrying out the work

My pot is a lot higher than £30k

The mismatch you refer to is trying to deal with a few issues
Providing for my wife after I die
Protecting us from inflation
Ensuring my pot is protected should my wife and I die early

beamyup

I wonder why the IFA rates are lower, is this just down to higher charges (inevitable?) or due to other things?
Is HL able to negotiate better rates than an IFA? (likely)
Is HL checking with providers that the IFAs are not checking (unlikely)
Are your advisers really IFAs or are they tied (FAs)

MEM62

choi wrote: »

Both annuity quotes from FAs were lower than HL quote

But the advice wasn't to compare using an FA - it was to compare using an IFA. It is sound advice and you would be well served by heeding it.

xylophone

But the advice wasn't to compare using an FA - it was to compare using an IFA. It is sound advice and you would be well served by heeding it.

Would he take it if he got it?

https://forums.moneysavingexpert.com/discussion/comment/75972700#Comment_75972700

choi

MEM62 wrote: »

But the advice wasn't to compare using an FA - it was to compare using an IFA. It is sound advice and you would be well served by heeding it.

My quotes were from two IFAs
I made a typo