Are OMOs confusing for consumers?

Are open market options creating confusing for consumers? Karen Barrett, CEO at unbiased.co.uk gives her viewpoint.

By Karen Barrett 

There is no doubt that getting the best annuity deal is one of the most important decisions people make in their lives and more needs to be done to educate people about their at-retirement options. And we know just how important advice is in the process of finding the best annuity. Our research shows only 27 per cent of people state they’d be confident to arrange an annuity without the help of a financial adviser, yet shopping around and taking advice can lead to a significant increase in the income received during retirement. Additionally, our Value of Advice report shows those who have taken advice have an average pension pot of £74,554.30, nearly double that of those not seeking advice.*
 
The launch of Pica’s directory is once again highlighting the importance of helping people to shop around for the best annuity deal, but we know the key in any consumer search engine is to ensure the options included in the search offer value, are clearly labelled and easily recognisable for consumers. The mixture of providers, semi-tied and financial advisers listed on Pica’s directory could easily lead to confusion, something that Pica needs to get right. Highlighting the value of whole of market advice is a core element in the annuity process and a commercial search engine displaying a list of providers or tied advisers is not going to solve the current consumer apathy or necessarily lead to better outcomes for consumers in need of help when planning their futures.
 
The ideal solution is for consumers to speak with whole of market advisers, as they are specialists in their areas and can easily guide those searching for advice through the process of selecting the right for options for their unique situation.


*Findings from Value of Advice report 2012: http://www.unbiased.co.uk/Value-of-Advice-Report-2012.pdf


More articles