Annuity without using financial adviser

incus432

That's helpful - thank you dunstonh! I had no idea about unbiased etc

Would you suggest I just search for local IFAs?  Online searches just tend to bring up links to unbiased. Is the 'Financial Advisor Bureau' search any good?

Also on the moneyhelper site, after searching for annuity rates (presumably commission based) there is a link "Find a retirement adviser.  You can find FCA-registered financial advisers who specialise in retirement planning in our Retirement adviser directory"  I am unclear on the status or quality of the people and firms who come up here.

DRS1

incus432 said:

Apologies for jumping in on this old thread but I have been looking at taking out a fixed term annuity from a SIPP (120k before lump sum) for 8 years to fill a gap before state pension. Based on the useful advice here I understand an IFA can get better rates because they charge a fee to the client rather than get paid commission by the annuity provider.  

I therefore got a name from Unbiased. However this IFA told me he would have to conduct a full review of our finances and charge accordingly. Pressed he said he could give 'limited advice' on a fixed term annuity and would be paid by 3% commission paid by the insurer (ie c £2700). (I thought this was no longer alllowed?)  I told him I had understood I would pay him a fee for the service/advice and get a better 'no commission' annuity rate/ However it seems he will not do this without doing a full review.

Is this expected or will I get a more helpful response from another IFA (i have now tried Vouchedfor).  I am reluctant to enter into a full review of our finances and end up having to pay large fees for this when I am reasonably sure (within limits) what I need, and have managed our SIPPs, ISAs and planning for 20 years. If I am only getting the 'commission rate' annuity I might as well just use a broker.

Thoughts welcome

I hesitate to mention this because I am sure I will find out all the reasons I should not have used them but in case it is useful:
I bought an annuity from my personal pensions earlier this year using something called Retirement Line (they will appear if you google them).  They are just annuity brokers so you won't get them asking to do a full review.  They do get paid commission - not sure if they are high (don't tell me please).
My annuity was for life but they do do Fixed Term annuities as well.
They did need the odd prod but they got the job done.
I guess there are other annuity brokers out there who would be equally unintrusive.

incus432

dunstonh said:

There appears to be some confusion here as both full advice and limited advice can only be done on fee basis.  Whereas execution can only be commission or fee agreed basis.     Advice cannot be commission basis (whether limited or full).   Any hint of advice and it is classed as advice and commission is not allowed.

 Email from the IFA after call

"Normally clients chose to pay via commission, but you always have the option of direct payment with no commission as an alternative. As I said, any IFA will need to provide financial advice which involves an understanding of the customers financial circumstances. "

I shall not be using him

SmokeysTravels

The Moneyhelper site will allow you to do annuity quotes both lifetime and fixed term. It is free to use and private, so you don’t get bombarded by people trying to sell you something. You can use it as many times as you like and it’s live data, so if you did a quote today and another in a month’s time you may find a completely different company at the top of the charts as they change their rates frequently. All the contact details for the annuity providers are there, so you could contact them to see if they will deal with you directly. Some will, but some will insist you use an annuity broker or a financial adviser. 

 

If you want to see if going through annuity broker will get you a better deal, try one and see what they come up with. 

dunstonh

That's helpful - thank you dunstonh! I had no idea about unbiased etc

It's gone from originally being an IFA-only directory that was a small monthly cost for IFA firms (£45pm) to becoming a lead generation site for firms that need business (firm paid an increased fee for the listing and had to pay for each lead the site generated)  to most recently becoming a lead generation site for national and large regional firms that are mostly FAs.

Most IFAs don't need the business.  They are at or above capacity and get enough naturally.  So, a small local firm isn't going to want to pay £594pm for 3 locations or £3960pm for 20 locations.   With most IFAs no longer using unbiased, they let the FAs in and most FAs are regional/national and have big pockets as they have big charges.

 Is the 'Financial Advisor Bureau' search any good?

Not heard of that one.  

Also on the moneyhelper site, after searching for annuity rates (presumably commission based) there is a link "Find a retirement adviser.  You can find FCA-registered financial advisers who specialise in retirement planning in our Retirement adviser directory"  I am unclear on the status or quality of the people and firms who come up here.

FA and IFA will be listed.

I guess there are other annuity brokers out there who would be equally unintrusive.

A number of the "brokers" are IFAs with a website focusing on a particular subject area.   

 Email from the IFA after call

I shall not be using him
"Normally clients chose to pay via commission, but you always have the option of direct payment with no commission as an alternative. As I said, any IFA will need to provide financial advice which involves an understanding of the customers financial circumstances. "

he is incorrect.   Their choices restrict their business model.   Regulations do not.      If an IFA firm doesnt want to do "execution only" then that is a choice.   Often, you find the bigger the firm, the more likely they will have systems and controls in place that restrict the adviser in some way as the firm has to have all advisers singing from the same hymn book and to be compliant, they have to cater for the lowest common denominator.   

I have seen the software provided to larger firms with employed advisers and they turn off a lot of the functionality that smaller firms will have turned on.

in a way, its no longer just FA vs IFA but now FA vs IFA group vs independent IFA.

incus432

MallyGirl said:

you might do better by finding a local IFA - especially if you can get personal recommendation - rather than one that has paid for an entry in unbiased etc.

It should be simple but isnt! Sadly I don't know anyone who has used one locally.  However have located one and asked if they do execution only and what they would charge

Update - so far had replies from 3 IFAs - none will do execution only, all will charge a minimum of 2k for advice and that they can only get the same annuity rates as a member of the public. Hmm

ian16527

I used L&G direct for a small annuity 2 years ago (£50k). I used Hargreaves Lansdown annuity comparison to sanity check and L&G came out top but it changes regularly so could be another provider top at the minute. See what an IFA can get you but also use the comparison site to give a comparison 

zagfles

incus432 said:

Apologies for jumping in on this old thread but I have been looking at taking out a fixed term annuity from a SIPP (120k before lump sum) for 8 years to fill a gap before state pension. Based on the useful advice here I understand an IFA can get better rates because they charge a fee to the client rather than get paid commission by the annuity provider.  

I therefore got a name from Unbiased. However this IFA told me he would have to conduct a full review of our finances and charge accordingly. Pressed he said he could give 'limited advice' on a fixed term annuity and would be paid by 3% commission paid by the insurer (ie c £2700). (I thought this was no longer alllowed?)  I told him I had understood I would pay him a fee for the service/advice and get a better 'no commission' annuity rate/ However it seems he will not do this without doing a full review.

Is this expected or will I get a more helpful response from another IFA (i have now tried Vouchedfor).  I am reluctant to enter into a full review of our finances and end up having to pay large fees for this when I am reasonably sure (within limits) what I need, and have managed our SIPPs, ISAs and planning for 20 years. If I am only getting the 'commission rate' annuity I might as well just use a broker.

Thoughts welcome

Have you looked into a gilts ladder instead, the "mortality premium" for a fixed term annuity up to SPA may not be that great particularly if it has spouse protection, unless you/spouse are in poor health. Also it seems index linked fixed term annuities are quite hard to find - which if you want to (sort of) replicate the state pension are what you really need. But doing an IL gilts ladder is not too hard if you're used to managing investments yourself and are handy with a spreadsheet

incus432

SmokeysTravels said:

The Moneyhelper site will allow you to do annuity quotes both lifetime and fixed term. It is free to use and private, so you don’t get bombarded by people trying to sell you something. You can use it as many times as you like and it’s live data, so if you did a quote today and another in a month’s time you may find a completely different company at the top of the charts as they change their rates frequently. All the contact details for the annuity providers are there, so you could contact them to see if they will deal with you directly. Some will, but some will insist you use an annuity broker or a financial adviser. 

 

If you want to see if going through annuity broker will get you a better deal, try one and see what they come up with. 

Thanks - yes that's where I started my research. Many will not deal with the public directly.  The broker (Retirement Line) says he can do better but obviously takes a commission.  I was hoping that I could do even better with an IFA but so far none will play ball except for going through a full (and expensive) finance review.

incus432

zagfles said:

incus432 said:

Apologies for jumping in on this old thread but I have been looking at taking out a fixed term annuity from a SIPP (120k before lump sum) for 8 years to fill a gap before state pension. Based on the useful advice here I understand an IFA can get better rates because they charge a fee to the client rather than get paid commission by the annuity provider.  

I therefore got a name from Unbiased. However this IFA told me he would have to conduct a full review of our finances and charge accordingly. Pressed he said he could give 'limited advice' on a fixed term annuity and would be paid by 3% commission paid by the insurer (ie c £2700). (I thought this was no longer alllowed?)  I told him I had understood I would pay him a fee for the service/advice and get a better 'no commission' annuity rate/ However it seems he will not do this without doing a full review.

Is this expected or will I get a more helpful response from another IFA (i have now tried Vouchedfor).  I am reluctant to enter into a full review of our finances and end up having to pay large fees for this when I am reasonably sure (within limits) what I need, and have managed our SIPPs, ISAs and planning for 20 years. If I am only getting the 'commission rate' annuity I might as well just use a broker.

Thoughts welcome

Have you looked into a gilts ladder instead, the "mortality premium" for a fixed term annuity up to SPA may not be that great particularly if it has spouse protection, unless you/spouse are in poor health. Also it seems index linked fixed term annuities are quite hard to find - which if you want to (sort of) replicate the state pension are what you really need. But doing an IL gilts ladder is not too hard if you're used to managing investments yourself and are handy with a spreadsheet

That is beyond my level of knowledge I'm afraid. (Still willing to read up if you have a good link)  Also if anything should happen to me I don't want my wife to have to manage the complexity.  Not going for index linked btw - just a plain single life level annuity (maybe with value protection). Can top up with money from ISA if necessary. Still have to find out if eligible for enhanced annuity.