He added: “Once advisers settle into the retail distribution review properly, they’ll do really well out of a growing desire for better outcomes at retirement as they’re crucial in pointing them towards the open market option. We need to work more with advisers to ensure non-standard annuities have a higher profile.”
Mr Groves said part of the decision to issue an initial public offering was down to growth projections of 80 per cent in the non-standard annuity market in the next three years.
He added: “The non-standard market benefits from all the factors that will drive growth in standard annuities but it has a market penetration point.
“About 30 per cent of pensioners who shop around get a non-standard annuity when somewhere between 50 and 60 per cent would be entitled to one but they aren’t aware of the open market option.”
Background
Last year national advisory firm Openwork and Partnership signed a deal for Partnership to be the only provider of enhanced and standard annuities for its restricted annuity panel.
Partnership agreed to pay £8.25m towards the development of an IT system to support Openwork’s underwriting.
Partnership will pay up to £1.4m a year over five years for ongoing services provided by Openwork, including the promotion of annuities to customers, provision of training for Openwork advisers, account management services and maintenance of the IT system.
Adviser View
Carl Melvin, managing director of Glasgow-based Affluent Financial Planning, said: “Partnership should be shouting this message from the rooftops. Advisers are critical in educating consumers about the open market option, and the fact they can get an enhanced annuity if they have health problems.
“But the problem is when people have small pension pots, and even though advisers are best placed to help them, it’s simply too costly on both sides.”
