Around 1,000 intermediary businesses has joined the Pensions Income Choice Association’s retirement directory ahead of next week’s launch.
Speaking to FTAdviser, Tom McPhail, Pica chairman and head of pensions research at Hargreaves Lansdown, described this as a “great number” and a “unique opportunity” and urged more advisers to join as “their competitors are on there”.
‘Pick-A’ opened for pre-launch registration for retirement specialists to be part of a consumer-focused directory in November.
The directory will act as a ‘shop window’ for regulated retirement specialists to promote their services to people reaching retirement each year needing to make the right decisions when switching on their pension income.
The directory is free for intermediaries to appear within and free for consumers to use. All intermediaries must be authorised by the Financial Conduct Authority.
Intermediaries’ panels must contain companies that write, in aggregate, at least 75 per cent of the total market’s annuity premiums. There are currently around 12 to 13 companies competing for annuity business.
Mr McPhail said: “We have rejected a few firms because the range of providers that they offered are not enough. Although Nest did not apply, they would not have been been able to join as they do not have enough providers on their panel.”
When shown a trial of how the website worked, FTAdviser questioned whether the published intermediary charges could deter potential investors as fees disclosed for entries seen ranged from £300 to £1000.
Mr McPhail responded: “In respect to pressure from consumer groups we felt it was important that intermediate costs were disclosed upfront. We recognise the risk involved in that and it could deter investors from using this.”
Over time, Pica wants to progressively increase the minimum standards. It currently mirrors the Association of British Insurers’ ABU code which has a 75 per cent threshold for total market annuity premiums.
Mr McPhail said: “The directory is not going to fix the annuity market overnight but it is an essential component.
“Now the director is populated, we can unveil it to the public. It will be a progressive development. It will take time to build up and and we will refine it as we build experiences.”
The directory is provided on a non-profit basis and has been led by Pica but it has been developed with input from members of the public and from regulatory and government bodies including the Department for Work and Pensions and the OMO review group.
