Scottish Widows - why need to use an 'intermediary'?

WIAWSNB

Hello.

I have two small pensions which I wish to transfer and amalgamate into one, and turn it into an annuity. Scottish Widows (who I'm not currently with) provides one of the best current annuities, so I wished to explore this.

On their website, they say such a transfer would require an 'intermediary'. I've just accidentally stabbed the 'end call' button on my phone instead of 'speaker' after a 10-minute wait for one of their advisors - mega-grrrr - so can anyone explain to me, please, why an 'intermediary' is required? Why can't SW themselves request the transfers and do the task? And, if an 'intermediary' is required, where do I find one?

Thanks.

DRS1

Last year I got an annuity.  I tried to do it myself but neither Standard Life nor Scottish Widows (the two best quotes on my list) would talk to me (being a man off the street).  There may be some others  who will and your current pension provider will probably give you an annuity without you needing an intermediary to do it.

In the end I used Retirement Line.  Probably not the cheapest option and maybe not the best but it got the job done.

Some on here will tell you to get an IFA and if you can find one who will confine themselves to getting you an annuity that may be cheaper and better value than the sort of broker I used.

Hargreaves Lansdown also offer an annuity service if that is an organisation you might feel comfortable with..

dunstonh

On their website, they say such a transfer would require an 'intermediary'. I've just accidentally stabbed the 'end call' button on my phone instead of 'speaker' after a 10-minute wait for one of their advisors - 

SW don't have any advisers.  That is why they need you to use an intermediary.

So can anyone explain to me, please, why an 'intermediary' is required?

Because SW hold regulatory permissions to be a manufacturer of annuities.  Not a retailer of annuities.

However, if it makes you feel better, the providers that do retail direct to consumer typically charge more than an intermediary unless your fund value is low.

 Why can't SW themselves request the transfers and do the task? And, if an 'intermediary' is required, where do I find one?

The setting up of a retail distribution arm costs money.   So, its unlikely to be profitable for them.   Especially on a product that has been out of favour for most of the last 15 years and likely only has another short window before it goes out of favour again.

Any local IFA is an intermediary.  Some websites online would be an intermediary.

Albermarle

Why can't SW themselves request the transfers and do the task? 

Dealing direct with the public costs money, especially with  financial products that are heavily regulated.
By working through an intermediary they can minimise customer service staff/costs.

Linton

Albermarle said:

Why can't SW themselves request the transfers and do the task? 

Dealing direct with the public costs money, especially with  financial products that are heavily regulated.
By working through an intermediary they can minimise customer service staff/costs.

Yes, plus since most intermediaries are small, possibly 1 person, businesses their overhead costs will be lower.  They can therefore offer a better deal than you would get by going direct. The annuity companies would prefer you to use an intermediary, hence they will price their products to encourage you to do so.

WIAWSNB

Thank you, everyone.

That makes sense, and I think I have it all in hand now. I have spoken to a few 'intermediaries', including LV and MyPensionExpert. All have suggested Scottish Widows as being the best provider for my wee annuity. Just clarifying the transfer amounts from both my current providers, and should be good to go - thanks.