Possible regulation gaps at the pension annuity buying stage, or annuitisation time, is troubling the FSCP.
Concerns about the potential gaps in regulation that exist in this decumulation stage of life have been highlighted by the Financial Services Consumer Panel (FSCP). It is becoming concerned there are several different organisations that are responsible for the regulation of the market for financial products for those individuals in later life and there is therefore a risk regulators overall may not take a holistic approach.
Adam Phillips, who is the chairman of the panel, suggested that it is crucial that people who have worked hard to save for their time in retirement are able to get appropriate financial advice and buy financial products which are value for money and can sustain them into old age. Andrew Strange, director of policy at the Association of Independent Financial Advisers (AIFA), has stated that it was publishing adviser practice notes for its members who operate in the decumulation area, and he said that many firms now have specialist licences in place for advisers who work in the decumulation, or pension annuity purchase, area. However, there is an urgent requirement to address the issue of adviser capacity and ensure that their is an introduction of new blood into the financial adviser market.
Phil Naylor, director for individual annuities of L&G, said that there were more options and products now available at retirement for clients at this stage of their life to consider. He added that the common conventional annuities were pretty straightforward when priced just by age, sex and pension fund value but with more sophisticated pricing and individual underwriting, such as the introduction of postcode rating and enhanced annuity options, there is much more choice, and, as a result of all this, both advisers and clients need to spend more time reviewing and considering the best retirement option. It’s not just about finding the best annuity rates these days.
