Gateway Specialist Advice Services launches small annuity referral service for Sesame and Bankhall members
Sesame and Bankhall members now have access to a new referral service for small annuities that provides a solution to the growing problem of how advisers cost effectively service clients with small pension pots of less than £30,000.
Advisers can opt to refer their annuity business to Gateway Specialist Advice Services, whose team of specialists will consult with the adviser and their client with a view to writing the business on their behalf. Gateway will review the client’s circumstances, discuss the most appropriate shape for their annuity and then provide a personal recommendation. The adviser will also receive an introduction fee, whilst Gateway will take full regulatory and professional indemnity responsibility.
The service has been designed to cater for a market that is forecast to more than double over the next decade, from £14bn in 2008 to £32bn by 2018. The majority of this growth is forecast to come from funds under £30,000, which currently account for 80% of the market.
Across the whole market, only a third of people shop around for the best annuity rate on retirement, despite a difference of up to 30% on the best and worst rates available. An annuity can potentially be enhanced further if the client suffers from an impaired health condition. Research from Partnership shows that 40% of the population could qualify for enhanced annuities, however only 10% of all annuities sold in the UK are enhanced.
For enhanced annuity cases, using a simple set of medical-related questions, Gateway provides fully underwritten enhanced annuity quotations from Partnership using fast, intelligent underwriting specifically designed for small cases. If this quotation is accepted, it will then progress to an on-line application managed by Gateway.
Stephen Young, Chief Operating Officer for Sesame Bankhall Group, said: “Independent advice remains the gold standard, but our profession has to face up to the dilemma of how we service all clients cost effectively. To undertake a full advice process on small annuities can mean that advisers are actually losing money on some cases. This will be brought into sharper focus as advisers review their client proposition and we move to the new RDR world of adviser charging. Gateway’s referral service is the shape of things to come. It enables advisers to continue to service their clients and add value by boosting their income in retirement, but in a way that is sustainable for the firm.
“We are also pleased to be able to offer Partnership’s new online enhanced annuity solution. It is good to see product providers investing in this area of the market, which is set to grow significantly over the next decade. We expect to see increased demand from people looking for expert financial guidance, and advisers are ideally placed to offer a range of valuable services and open up additional income streams in the future.”
Commenting on the launch, Mike Preston, Head of Gateway Specialist Advice Services, said: “Demand for our services has grown as advisers appreciate how it can enhance their offering to clients whilst at the same time removing the administrative and liability burden. Our new service will provide annuity advice for many clients who previously would not have received it. It makes clients with small funds more lucrative for advisers, who can now provide appropriate, inexpensive advice without the associated costs. This allows them to remain focussed on other important business areas. Given the changing demographics in the UK and the expected growth in the at-retirement market, this simple, fast and effective process means advisers can demonstrate their commitment to TCF, whilst potentially opening up a range of future business opportunities.”
Advisers who would like further information can call Gateway on 0845 045 0150 or email firstname.lastname@example.org