LV= has apologised after an "administrative error" left an adviser's client with an income projection 17.5% lower than promised.
Kevin Neil, an IFA at Clarion, arranged a with-profit annuity for a client with a Clerical Medical pension fund. However, the fund arrived on 28 May, after the 30-day guaranteed period which began on 13 April.
The difference in fund value on the original illustration and that actually received was -0.5%. But LV= issued a revised illustration by email detailing a reduction of 17.5% in the client's income.
After telephoning LV= to instruct them not to proceed, Neil was told that the policy had already been set-up.
"To drop the rate 17.5% in such a short space of time doesn't seem to be right," he said. "There have been rate changes over the last 12 months but I haven't come across anything like that."
According to the complaint handler, annuities cannot be cancelled after being set up.
"The 30 day cancellation period starts from the date of the initial illustration, so once the guarantee expires, LV= appear to be perfectly entitled to issue a revised illustration reducing a client's income by 17.5% and there is nothing, apparently, the client or we as advisers can do about it," Neil said.
"Compared to other providers LV= don't seem to be following best practice.
"A Just Retirement quote is guaranteed for 30 days just like LV=, but if you get the quote into them during that period they then guarantee it for another 30 days, because they realise that to go through the whole process in that time is sometimes not realistic."
Michelle Cutler, head of investment linked annuities, said: "An administrative error occurred on this occasion and we have been dealing with the IFA to rectify this.
"We will be rewriting the policy and honouring the quote on the original illustration.
"At LV= we strive to offer good service and we are sorry that on this occasion we have not delivered to the standards we set ourselves."
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First mentioned in Cridland Report
Second acquisition of 2019