Pensions - Articles - FCA probe into annuity mis-selling must tackle wider issues

 Historic issues that also need addressing and may have caused additional mis-selling issues include: the provision of enhanced commission rates certain companies would receive in a post RDR environment and how this was against the principles of the RDR. Additionally, and while Portal Financial has always worked on a fee basis and not commission, it also believes that the FCA should look at whether historically there was any market abuse due to preferential and volume-based commission payments

 Jamie Smith-Thompson, managing director of Portal Financial, believes: “We welcome the FCA review into the historic problems with the annuity market; we would also like to ensure that the regulator conducts a thorough review and goes beyond the issue of whether annuity clients would have been better served with an enhanced or standard annuity. As an adviser which has always worked based on fees we have been concerned that there may have been differential pricing based on volumes. Furthermore and accepting that we have never worked on a commission basis we also hope that the FCA investigates issues such as commission bias and commission paid in other ways. It is my personal opinion that the issues go way beyond question of whether a standard or enhanced annuity offered best advice and there were some more fundamental issues with the market. We also believe that annuities have and should continue to form part of some pensioners’ retirement strategy, and the sooner that we can restore faith in the industry the better."