One of the leading voices in the debate on annuity reform has called on the financial services indus...
One of the leading voices in the debate on annuity reform has called on the financial services industry to encourage use of the open market option among retiring investors to shop around when purchasing an annuity.
Stuart Bayliss, managing director of Annuity Direct said investors are not getting value for money when they retire and buy an annuity because few investors know they can switch to a different product provider to buy their annuity.
Bayliss believes consumers ought to be better informed about the options available to them upon retirement. He said: "Less than 25% of those retiring exercise their OMO."
Bayliss is convinced that the right to choose a different provider will have to be greater publicised in the future.
"Insurers in the end will be forced to participate in the OMO. The FSA will certainly start the process," said Bayliss.
Legal & General marketing director Andy Agar said: "We clearly state to our pension holders their right to buy a product on the open market. Not all providers do that so I would agree with Stuart."
FSA spokeswoman Jackie Blyth said: "We can't predict what's going to happen on commercial grounds but certainly want customers to have as much information as possible so they can make a choice as to which is the most suitable for them."
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