02 December 2009
Aviva is set to route customers with small pension pots to an
annuity referral service to find the best deal from a panel of
rival providers. Customers with pots worth less than £30,000 will
be referred to the service.
Customers are lead through their various annuity options by
The Annuity Team and offered rates from a panel which
includes Aviva, Aegon, Prudential, Canada Life, Legal & General
and Partnership Assurance.
Aviva has already tested the model via a pilot with new retail
customers. According to The Annuity Team a quarter of all customers
referred to date have received an improved rate. The service is now
to be extended to its maturing pension customers. Aviva says that
it checks customers do not have an existing financial adviser
before referral. Aviva does receive a cut of the commission The
Annuity Team receives from the chosen provider but neither has
disclose the amounts concerned.
Aviva annuity business director Clive Bolton says: "As an
industry we have neglected people with average-sized pots. Seventy
per cent of pension funds are under £35,000 so we think this is
close to the heart of the reputation of the industry. We need to
get this right."
The Annuity Team chief executive John Mamelok says: "Smaller
pots might not be commercially viable but we have a low cost base
so it is mutually beneficial for firms to refer cases to us. The
service enables customers to select the most suitable option at a
Annuity Exchange director Stuart Bayliss says: "It is good news.
It is Aviva beginning to do what they said they would do with car
insurance, where if you get a better quote with someone else they
will do the business with them. This is a way of enabling that to
happen with smaller annuity cases."