A scandal or a cock up? This is the question I ask myself when I hear about Prudential’s £23 million fine for failures relating to non-advised annuities sales. This follows Standard Life’s £ 30 million fine in July 2019. As with most high profile public cases, there is a bit of both. First, I declare an interest as I have formally and informally helped both companies in the pa ...
I recently read a good article about non-advised annuity commissions and I think it is helpful to investigate the issue of non-advised versus advised annuities. I have been on both sides of the fence I start by saying that I have seen both sides of the fence and both advised and non-advised annuity services should result in the client getting the highest possible annuity inco ...
Blow for pensioners
Blow for pensioners as bond market rally hits annuities This was the headline for a story in the Financial Times – see - Blow for pensioners as bond market rally hits annuities These are the notes I provided for the FT Annuities are very expensive Annuities are very expensive at the moment which is another way of saying the rates are very low. The reason is simple; gilt a ...
Annuities-hard act to beat
Annuities; legalised theft or best way to convert capital into income? We have been involved with annuities since they first became a topic of conversation almost 30 years ago. It is probably true to say that before 1990 hardly anyone knew much about annuity but that all changed with the launch of specialist annuity brokers in the early 1990’s such as Annuity Direct which late ...
Annuity or Drawdown
Annuity or Drawdown? – that is the question It doesn’t matter if you are looking to convert your pension pot into income, considering a DB transfer or running a drawdown plan, one the most questions in financial planning is whether to buy an annuity or invest in a drawdown plan. Before looking at this important question let’s be clear on the terminology. Annuities They are ...
Annuity Update December 2018
When will annuities bounce back? The market has been waiting a long time for annuities to bounce back from historically low levels but despite a few false dawns, rates have remained stubbornly low. The chart below shows the income from our benchmark annuity* (left axis) and the yield form our benchmark gilt** (right axis) over the last three years. *The benchmark is a £ 10 ...
The case for annuities is getting stronger
It is still not the year of the annuity! In January I wrote a piece asking if 2018 was going to be the year of the annuity? For the Chinese, 2018 is the year of the dog but in the UK, annuities have been in the dog house since pension freedoms and they look like remaining in the kennel for sometime to come. The case for annuities is getting stronger There are few people more ...
Annuitisation; it shouldn’t be a secret
In last month’s article I said retirement advice doesn’t have to be black or white because there are solutions that bridge the gap between annuities and drawdown. I went on to say that I thought it was difficult to innovate annuities there was plenty of scope to innovate the way advice is delivered. I was very pleased to get a response from Peter Ellis at Just Retirement. He ma ...
Annuities & Drawdown - it is not black or white
Fixed term income plans – retirement options do not need to be black or white It seems that every time I go a conference there is someone talking about the need for innovation in retirement income plans. Having watched various product developments over the last 20 year it comes as no surprise to me that the elusive new plan which fits half way between an annuity and drawdown h ...
Practice what I preach
It has been 16 months since I started advising clients again after a break of four years. Obviously much has changed after pension freedoms not least that annuities are less popular and drawdown has become the new default at retirement. This is not a problem nor an issue for a good adviser because they will always work out what is the best solution for the client rather than be ...
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