UK - PSFM, the financial adviser unit of consulting actuaries Punter Southall & Co, has called on the Government to improve the quality of advice around annuity purchases.
The comments come as part of a response to the Government’s consultation on annuities, which closed on April 5.
Gordon Simpson, senior consultant at the firm, said that ministers must also consider allowing the cost of financial advice as a tax-deductible expense, and employers should be encouraged to meet some of the advisory costs for retiring employees.
“Some of the proposals set out in the consultative paper will increase further the range of annuity options available and will only be of value if accompanied by the appropriate levels of advice,” said Simpson.
He added: “In our opinion, the FSA should regulate advice in the annuity market as a ‘permitted activity’, with minimum qualification. Providers should be encouraged to illustrate not only their quotation rates but also the best likely rates available in the market at the time of annuity purchase.”
According to the Government, the recent consultation paper targeted greater annuity flexibility to meet the needs of future annuitants. The paper comes amid continuing debate around the legitimacy of forced annuity purchases.
By Madhu Kalia
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