Pensions - Articles - FCA Pension Wise guidance on secondary annuities looks light

 Steven Cameron, Pensions Director at Aegon said: “The FCA consultation on Pension Wise standards gives the latest insight into the risks and issues it sees for customers who may consider selling their existing annuity from next April.

 “Those advisers considering advising on this market might want to review this, although clearly regulated advice with a personal recommendation will go much deeper. While the document identifies the main areas to consider, we believe greater emphasis needs to be given to the very different implications of selling for a lump sum rather than transferring into drawdown. We also believe customers will want an early understanding of how their health status will affect selling price and the likelihood of having to provide verifiable medical evidence. "It should be noted that the FCA will be consulting separately on who should fund this additional service from Pension Wise. Currently Pension Wise is funded by types of firms deemed to benefit from the pension freedoms. Those who may benefit from the secondary annuity market could be a very different population, in particular those third party firms or existing annuity providers who will look to buy (or buy back from their existing annuitants) secondary annuities to generate profit.”