The pensions industry is beginning to suggest that the Financial Services Authority (FSA) should emphasise the need for advice in respect of retirement options, stating that it is wrong to assume that a pension annuity is always the right choice for retirees.
Some state that the FSA’s website shows misleading annuity tables. Looking at the Moneymadeclear website the FSA offers as guidance to retirees it does appear to be pretty good and user-friendly but it is not what it really should be, namely whole of market. It actually suggests that its annuity tables are comprehensive, but then adds the point that a few companies have chosen not to provide them with data, and these companies are detailed on the tables. Thing is, how can the tables be comprehensive if they actually omit data from companies that have chosen not to provide it.
What the website should emphasise more is that there are many retirement options available to choose from, even within the annuity domain, and that only a whole of market independent financial adviser (IFA), will have the knowledge of and access to all the different retirement products. Given the different factors involved in structuring an annuity package, the website could set out some examples of why a retiree might prefer to seek specialist advice in preference to trying to choose for themselves the right annuity package.
Much greater emphasis should be provided about the improvements that can be achieved in the way of underwritten annuities, as these are probably the most important development with annuity rates in recent years, and for that, you need proper advice. There are so many things to consider these days: where you live, married or not, occupation, whether you smoke, any medical conditions or medication, and so on.
For most people, a straightforward form of annuity has the real advantages of relative simplicity and high security. But there is an argument that only a good adviser can put together the right bespoke package for each client. It is not simply about getting annuity quotes to find the best annuity rates.
Why is the FSA seemingly against acknowledging that fact and drawing it to the attention of retirees who need good sound financial advice? All we see instead is a statement released from an unnamed FSA spokesman stating that their website and the annuity tables in it provides everything anyone could need to find for themselves the right annuity package.