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The Financial Conduct Authority (FCA) has published the findings of its thematic review of non-advised annuity sales practices.
The FCA wanted to establish whether firms provided customers with sufficient information about enhanced annuities. The FCA looked at whether firms made customers aware of their potential eligibility for enhanced annuities and whether they encouraged them to shop around in order to potentially get a higher income from another provider.
The FCA found no evidence of an industry-wide or systemic failure to provide customers with sufficient information about enhanced annuities through non-advised sales. The FCA found many of the firms provided clear and comprehensive information to customers with written communication tending to meet the standards required.
At a small number of firms the FCA did have concerns when significant communications took place orally – normally over the phone – which was likely to have caused some customers to purchase a standard annuity when they may have been eligible for an enhanced product.
These failings were of sufficient concern at a small number of firms that they are now being asked by the FCA to review all non-advised sales from July 2008 and, where appropriate, provide redress; these firms are also being investigated by the FCA’s Enforcement Division to determine whether further action is necessary.
As part of the paper published today the FCA has highlighted a number of areas of concern found as part of its review. These include:
In the report, the FCA encourages all firms to consider how their communications and sales process may be strengthened to ensure consumers are getting all the information they require at the time they require it. The FCA also encourages any customers who have already taken out an annuity, but feel they may have been given insufficient information about enhanced annuities, to raise this directly with their annuity provider.