Annuity experts have warned customers will face more difficulties as they struggle with advice propositions post RDR.
Speaking at a Prudential debate on the changing retirement landscape, Retirement Solutions managing director David Bell said all clients think they have been advised, no matter the service.
Graeme Riddoch, sales and marketing director at The Open Market Annuity Service [TOMAS] agreed advised/non-advised services are a "regulatory concept" that meant little to the consumer.
Billy Burrows, director of Better Retirement Group said: "It's not helpful to talk about no advice and advice. [We need to focus on] what does it mean to treat customers fairly, how to do it compliantly and how do we deliver a service. If we get those things right, it will mean a service that customers will benefit from."
He added customers would fail to purchase the right shape of annuity without full advice. He said; "No one buys an annuity without speaking to someone. There are three questions you must ask- when to buy, the type of annuity and the options. How can you answer those without giving advice? Those questions are relatively more important to people retiring with small pots."
Vince Smith-Hughes, head of pensions business development at Prudential said industry initiatives such as the Open Market Option made everyone focus on the best rate rather than the best product.
Riddoch added: "In a perfect world, [all annuity advice] would be advised, but how can we do it economically? [TOMAS] provide software and a service. The percentage buying a spouse's pension is higher than the market average. It's not a question of bunging together a few quotes; it's about making informed decisions."
Riddoch also said the problem would escalate in future as people joined NEST. He said: "Trustees will start looking at annuities. The average fund size is £27,000 and I think it will be lower in future. NEST has a panel but there are no mechanisms to help customers think about a spouse's pension or inflation."
Based on ONS data
Claim from SocGen's global markets division
Third annual Hampton-Alexander review
European Commission yields to pressure
Numbers in Adviserland