LV= and Aviva are the first pensions providers on board with Iress’s new submission service for annuities launched on 15 May.
Despite only hosting two providers currently it is aiming to become the first whole-of-market electronic system in the marketplace for submitting new annuity business.
This is an enhancement to Iress’ existing system, The Exchange, and adds to its current financial markets, wealth and mortgage management systems offering.
Iress says this new addition will help reduce the costs of professional advice, and will improve efficiency for advisers, as well as encourage efficiency in the annuity process for providers by speeding up the applications. It is also designed to enable quicker payments and removing the need for paper flows between the pension provider, distributor and annuity provider.
The service carries no extra costs for existing clients of The Exchange.
The Budget has moved annuities into a new phase of their life in the at-retirement marketplace, and now is a crucial point for providers in determining how the product will proceed.
Moving business electronically is almost always a positive step for efficiency. LV= in particular has said it is removing paper forms in order to speed up the annuity application process which makes doing business quicker and easier for advisers and their clients.
Iress envisages that this will help reduce the cost of professional advice, and allow advisers to dedicate more time and resources to current and potential clients. That depends, however, on whether annuities will continue to make up much of advisers’ business, which remains to be seen.
Anything annuity providers can do to make it a more compelling option for advisers and their clients is a positive step at a time when annuities need all the help they can get to remain on the agenda.
For advisers that advocate that their clients buy an annuity, being able to streamline the process will be a welcome incentive. The fact that LV= and Aviva are already on board is a good sign that providers have faith in the system, and a reduction in paper-based forms means funds can be transferred quicker and clients will receive their pension payments faster.