Aegon, recent sponsors of British tennis, including the Queen’s tournament, is setting up a new company, a new direct annuity firm, to sell annuities directly to consumers. As part of the plans, Aegon would link up with another provider for the enhanced annuity side of things and it is understood to be in talks with a number of firms offering that service.
Aegon currently offers conventional annuities and third-way products via independent financial advisers (IFAs) only. Their third-way products will not be offered directly to consumers.
Aegon UK Direct was established in March this year with Aegon UK’s chief financial officer Mark Laidlaw as a director. It will offer pension annuities directly to customers via six affinity partners, beginning with The Telegraph Group in the first instance. These customers are currently offered advice through Aegon UK’s wholly owned IFA, Origen, but Aegon says that the direct option will serve those customers who do not want advice and they also say that the offering will not be extended to the wider public. Naturally, a key to its success will be the ability to offer competitive annuity rates.
The new company will employ 11 staff in the first instance, and a launch date is yet to be confirmed. Commenting on these plans, a spokeswoman said that this new service would link in to services already provided to various affinity partners by Origen. Where it is clear full independent advice is needed, the customer would be referred across to Origen. In response to this move some in the industry are suggesting that providers changing to going direct are probably going to confuse customers, and it is already difficult to make it clear to them whether it is a whole of market or multi-tied proposition being offered when annuity quotes are being provided.